Meeting Transcript
June 26, 2008

Council Members Present

Edmund Pellegrino, M.D., Chairman
Georgetown University

Floyd E. Bloom, M.D.
Scripps Research Institute

Rebecca S. Dresser, J.D.
Washington University School of Law

Alfonso Gómez-Lobo, Dr.phil.
Georgetown University

William B. Hurlbut, M.D.
Stanford University

Peter A. Lawler, Ph.D.
Berry College

Paul McHugh, M.D.
Johns Hopkins Hospital

Gilbert C. Meilaender, Ph.D.
Valparaiso University

Janet D. Rowley, M.D.
The University of Chicago

Diana J. Schaub, Ph.D.
Loyola College

INDEX

• Session 1: Ethical Challenges of Expanded Newborn Screening
• Session 2: Ethical Questions in the Reform of Health and Medical Care
• Session 3: Ethical Questions in the Reform of Health and Medical Care: A Panel on Three Policy Proposals
• Session 4: Ethical Questions in the Reform of Health and Medical Care: A Panel on Three Policy Proposals, continued
  

   

CHAIRMAN PELLEGRINO: Good morning, especially to those of you who were right on time. Forgive me starting a minute or two late violating my own first premise. And welcome to those who are in the audience. We're delighted to have you with us.

One or two announcements before we start the formal program. We have two new members who are still in the process of being reviewed. And I think you're familiar with their names — Dr. Elshtain and Dr. Landry. I'm speaking to the Council members now who know about this. They're not here because they've not completed the entire process, which is rather complicated and takes a significant amount of time, more than we anticipate, usually.

I'd like to bring you up-to-date on the reports that we're working with so that you know there are coming very close to completion and we'll have several publications in the late summer or early fall and beyond that.

One is on newborn screening, and you'll be seeing a draft of that today or have seen it. The other one is on the definition of death, which is completed virtually except for one or two small items.

Also, we have completed the — the reason I'm having trouble, this is not one of those microphones you can turn on and leave it alone. You have to keep your finger on it, and —

PROF. SCHNEIDER: In order to shorten comments.

CHAIRMAN PELLEGRINO: I'm relaxing my finger from time to time, maybe when I have something I don't want you to hear. The organ transplant document, which is in a far advanced state but still needs reworking after you've made your comments on it. And we're very eager to hear from all of you, especially before we put it to bed. So we can look forward to at least three documents in the early fall.

And with the dignity volume and with others we're preparing before the end of the year, we will have completed our work we have in mind, and we'll have drafts for you on futility and on conscientious objection possibilities and problems in ethical issues and decisions by the professionals.

The two new appointments, as I said, we hope will be with us at the next meeting, but they will get all of the materials so that we'll have their input. And I think that's extremely important.

This morning we will pick up a discussion on the ethical challenges of expanded newborn screening, which has also been before us, and you have this document. And we're very much interested in having your comments, suggestions, so that we can put final touches on it, and this is an important document, I think, in the current situation. So I'm going to ask two of the members of the Council to open the discussion — Dr. Diana Schaub and Dr. Floyd Bloom. Diana, would you pick us up?

DR. SCHAUB: I want to thank Adam and Sam for another excellent staff working paper. They document just how dramatically the rationale for newborn screening has shifted. The 2005 ACMG report recommended a sizable increase in the number of diseases for which newborns should be screened.

And it strove to present that expansion as in line with the established principle that direct benefit to the newborn child should be the paramount and indispensable criterion for inclusion of a disease in a uniform screening panel. However, as the staff paper shows, the recommended expansion was not simply in number, but in kind.

We don't just have more newly eligible diseases being passed through the screen. We have an altogether new screen and a new justification for that screen. The old rule was screen only if you can treat. The new rule, although not yet so forthrightly expressed, is screen unless there is a compelling reason not to.

The adoption of this new rule seems to have been driven by a technological imperative and a research imperative, rather than, say, a strictly medical imperative. The paper details some of the ways in which the selection of disorders was skewed by the evaluative role given to the technology of tandem mass spectrometry.

So, for instance, 200 points were awarded to a condition just for being detectable using a multiplex platform. The privileging of the full profile mode, which will sooner or later be even more complete when DNA profiling replaces the existing platforms, is linked to the ACMG's redefinition of benefit. Benefit is no longer limited to direct treatment of the child, but includes notions of public benefit and, in particular, the progress of biomedical research.

The authors describe this transformation in strong terms, stating that hitherto for diseases that were poorly understood or for which no effective treatment was available, we as a nation have not been in the habit of subjecting individuals to mandatory screening merely for research purposes. Is this a habit we are now content to acquire?

It would seem so since the call for expanded screening has been answered by the states to such an extent that we are well on the way to a uniform system. According to the staff paper, the lone holdout is Washington State. Interestingly, not a state that I think of as backward. So why should this reputedly progressive state resist expanded screening?

The paper by the U.S. Preventive Services Task Force, included in our briefing book, points out that Washington and Massachusetts are two states that conducted structured reviews of scientific evidence as a result of which their state programs mandate screening for far fewer conditions. Thank goodness for that glimmer of independent-minded federalism.

I'm very much in favor of the Council moving forward with this report. Now, I think, may be one of the last useful moments in which to raise serious doubts about this incipient ethical shift in newborn screening.

My own preference would be for a return to the principle of “screen only if you can treat,” and I hoped that the final report would focus some attention on the downsides of screening, especially the effects of false positives, particularly when, as a number of experts have testified, the positive predictive value for any newborn screening test is less than 2 percent.

I wouldn't be opposed to providing an avenue for ongoing research on a wide array of disorders that don't meet the stringent criteria for mandatory screening, but if research is the aim, then in my view participation should be voluntary and informed consent of the parents should be required. Neither the technological nor the research imperative justifies state-ordered profiling of every newborn infant.

CHAIRMAN PELLEGRINO: Thank you very much, Diana. We'll hold comments until we've heard from Floyd Bloom and then open it up to the Council deliberation.

DR. BLOOM: This is going to test my eye/hand coordination to be able to do this. As they note in the preparatory paragraph, the expanded uniform screening panel proposed by the American College of Medical Genetics in 2005 and promptly endorsed by the Advisory Committee to the Secretary of HHS and thereafter by other groups has already been adopted in more or less identical fashion by virtually all of the 50 states.

Therefore, the first point I raise for discussion is what practical utility would be gained by having the Council speak out on the issue and declare whether it is ethically defensible to transition from the position “screen only if you can intervene” to the position “screen unless there's some reason not to” since it's already in effect in 49 states.

Can we expect to mount an ethical argument sufficiently persuasive to have 50 state legislatures reverse their prior commitments to the screening process or are there some constructive, congratulatory suggestions we can offer to state legislators who bought the ACMG's arguments in full?

We considered this question with an earlier draft in March, and at that point you had five chapters — "Trends in Newborn Screening in the Age of Genetic Medicine," "The Debate over Expanded Newborn Screening at Present," "The Debate over Future Newborn Screening," "The Case for Expanded Screening," and lastly "The Case for Caution."

And in my view this was a better way to report our diverse topics — our diverse views of the topic and the trends in the technologies. That draft had a much more neutral tone to the narratives than does the current version. The critical analysis is emphasized from the two Hastings Center reports that you gave us to read.

If we look at their arguments, while I'm sure, as we just heard from Diana, our Council's views are quite mixed, Bailey and Murray base their concerns on a five-year Hastings Center project that ended last year. That project examined general requirements for an ethical newborn screening policy and the degree to which the current technological capabilities conform to those ethical requirements.

They listed four concerns, which are summarized in one sentence: A newborn screening policy is ethically acceptable when it is evidence-based, takes into account the opportunity cost of the newborn screening program, distributes the costs and benefits fairly, and respects human rights. But these arguments are mainly rhetorical and without any data to support them.

Their conclusion was that there should be evidence on the scientific validity, clinical utility, and research cost of the screening test requires that the test be implemented and its cost and accuracy determined.

They say there should be evidence on the effectiveness of the research cost and the availability of treatment and that the positive and negative effects of introducing screening must be measured, aggregated, and compared.

While all that is at some level valid logic, operationally it's difficult for me to understand how heritable diseases can be detected before the onset of symptoms and pathology without starting with multiplex screening platforms.

Those are the kind advocated by Duane Alexander when he reported to us. Tandem mass spec methods can indeed measure multiple metabolic variants indicative of abnormal protein, carbohydrate, or lipid metabolism, but the future of this testing in my view and the arguments about cost opportunity will be set aside by the future higher throughput, higher sensitivity assays for direct DNA sequence diagnoses of the rare metabolic disorders that are mainly featured in the current primary and secondary screening panels.

More importantly to me, DNA testing will inform a variety of genetic markers for enhanced vulnerability to future diseases ranging from obesity, hypertension, cardiac, and other organic diseases to depression, schizophrenia, Alzheimer's, and even to those non-disease states that we all aspire to, namely successful aging.

What we might be able to speak to effectively are to encourage the pilot studies that Bailey and Murray note under their policy goals on pages 30-31 of their very long paragraph on those pages. I certainly agree with their premise that if the benefit of the screening is to anyone other than the infant being screened or that benefit is as yet uncertain, that parental informed consent should be required, along with a pregnancy-long educational process to help the parents make fully informed decisions with the knowledge that any genetic results will remain confidential to the family.

Whether such parental participation in the lifelong health- and wellness-oriented child rearing program can be made part of our concerns with the flawed current state of our health care system can be a topic for our second discussion today.

The second critical paper by Moyer, et. al, I find even less persuasive, especially given that the screening against which they are the most critical is the one currently adopted by the states. They focus only on the screening technology and questions of the current era and not those that one sees evolving into operational status tomorrow.

Given the unquestioned evolution of genetics-based disease vulnerability, comprehensive health systems will need the screening data in order to develop and apply preventative strategies. I believe in the ultimate evidence-based benefits beyond the infant being screened to family and society when they are implemented in light of the constraints of the Genetic Information Non-Discrimination Act of 2007.

Today's untreatable heritable diseases will never be treated unless we can understand the etiology, environmental and cultural influences, and the pathophysiology of specific genotypes. In my view, that all begins with screening. Let the heel stick blood blot be replaced by a buccal swab and whole genomic analyses.

CHAIRMAN PELLEGRINO:Thank you very much, Floyd. Before opening up for discussion, I'd like to ask if Dr. Adam Schulman and Dr. Sam Crowe, who had the responsibility for pulling together most of the research here — if they would like to add anything at this point. But before I do so, Adam, Sam, I have to apply a necessary benediction on our meeting.

It is not an official governmental meeting until I recognize the presence among us of our executive director, and I know that Dan Davis goes along with the benediction. So we'll just take it for granted, but we are now official and go on the record. Thanks a lot, Dan, for your help.

Now, Adam and Sam, do you have something to add?

DR. SCHULMAN: Yes, I will add a couple of comments in response to some points raised by Dr. Bloom. One point of clarification: The papers that we presented in the last meeting are intended to form the core of the first and third chapters. So there's nothing in those that will not be included in the final White Paper as currently envisaged.

And it is our — I think it's our purpose to try to lay out as neutrally as possible the issues — that is to say, present the case for and against the expansion and really leave to the members in their personal statements the decision as to which seems more plausible. So we will certainly do our best, especially in response to comments from this meeting and the past meeting, to include all the arguments on both sides.

I also mention about the question of what practical utility there could be to the Council weighing in on this point given that the states have adopted most of the recommended screening panel. As we discovered as we studied the ACMG report in detail, there are 54 diseases recommended, but really all but five of them could be justified under the traditional criteria of either being — either fully meeting the Wilson-Jungner criteria or being screened for as part of the differential diagnosis of those.

So really it's a question at this point of five illnesses, not all of which have been adopted by all of the states, and the ACMG is continually reviewing its protocols for expanding or possibly even contracting the recommended panel. And I think they are very responsive to suggestions and criticisms about how future illnesses ought to be added to the panel and under which criteria.

CHAIRMAN PELLEGRINO:Thank you very much, Adam. Sam? No comment? Rebecca?

DR. DRESSER: Thank you. I, too, think this is a very well written paper. I guess I have about three comments. One is another benefit external to the child that is cited in the Hastings papers is this benefit to the parents of knowledge and their desire to avoid the diagnostic odyssey. I didn't see so much on that particular justification in your paper, and so I wondered if you planned to address it. It seems to me that that needs to be addressed.

And it's interesting to me, it seems a lot of this is motivated by the advocacy of the parent groups and that diffuse organization. So sort of the role of advocacy in health policy might be worth mentioning. I'm not sure what you want to do with it, but it seems to me it underlies a lot of this momentum.

And then, secondly, I think as Floyd mentioned, there's this whole movement toward broader genetic testing or screening for everybody with this thousand-dollar genome people are talking about and pretty soon everybody will have this done and it will just be a part of primary care.

So it seems to me that in a way, if I understand it correctly, newborn screening is kind of going in that direction, too. And so maybe this is not so much a newborn-focused phenomenon, but a broader U.S. phenomenon where the increased ability to test for lots and lots of genetic predispositions is seen as exciting and positive and something we should move forward with. So I think that that particular angle would be worth mentioning, that sort of what's going on with adults and older children in terms of this sort of massive genetic evaluation.

And then, finally, this whole research issue. Of course, if someone wants to do research with the samples, they have to go through an IRB and meet the HIPPA requirements and so forth. So the implication in here was, well, research will just go on and the parents won't know about it and people will be identifiable. And, you know, I don't think that would happen.

So I guess it would be worth having a discussion of — and I don't know much about this, but I know people have written on how these newborn spots are used in research and what procedures have to be done before that can go forward. I think if it's anonymized, then you don't have to get permission, but if there's any kind of identification, they will have to get permission. So that seems to be worth putting in the report.

CHAIRMAN PELLEGRINO: Thank you very much, Rebecca. Sam or Adam, any further comment?

DR. CROWE: Thanks for your comments, Dr. Dresser. The research focus — we didn't mean to mislead you at all to suggest that there wouldn't be any informed consent. The idea was we wanted to show that behind the ACMG's — or within the ACMG's new proposal — there's a research component that's been added to a certain extent. And we only — and this is because the technology in some way picks or can pick up other kinds of diseases that aren't part of the differential diagnosis of the primary conditions they're recommending.

The idea would be that if a child has one of these diseases that's not part of the differential diagnosis, the physicians or technicians would report on those diseases and then offer the parents the opportunity to enlist their children as research subjects.

What we wanted to focus on, though, is that during the Wilson/Junger sort of criteria days, prior to the ACMG's report, the focus really was to find diseases that we could treat and not find diseases that we can't do anything about really or we don't know exactly what we can do about them.

DR. DRESSER: No, and I think that's very important, so I encourage that, I just thought maybe a footnote or something about what would then have to happen if somebody did want to go forward with research.

CHAIRMAN PELLEGRINO: Carl? Professor Schneider?

PROF. SCHNEIDER: I'm sorry that everybody has said these nice things about your report, because I wanted to say them first. I thought that it was really an exceptionally lucid presentation of some very difficult things.

I did agree that it was — it seemed to be quite tendentious. Over and over we were told, you know, should we abandon the old rock on which we have always stood, the it -must-be-for-the-benefit-of-the-child test. And I inferred from that that that would be a pretty perilous step to take. So if it is intended to be truly neutral, I didn't — I was not able to appreciate that as well as I should have been, I think.

I wanted to follow up on some of the things that Rebecca said. I find it very hard to say, "Here is the principle that ought to be used to solve all of these problems for the foreseeable future."

I know of very few issues which have been very satisfactorily resolved using only one principle. Prior commissions have often been content to use only one principle, and the result you see is some of the serious flaws of bioethical policy that we're contending with.

I'm persuaded that as to each thing you might screen for, there could be quite a complicated set of considerations, including not just, as Rebecca says, the interest of the family in avoiding the diagnostic odyssey. I can't see a difference between the interests of the family and the interests of the children in that case in avoiding the diagnostic odyssey.

So I'm nervous about the idea of saying "Here's the great principle. Apply it. Keep other things out of it." But I was quite struck by the Bailey and Murray story that they began with because it seemed to me to exemplify a systematic problem with the way that we make choices about medical care.

That article, as you may remember, was the story of the very sympathetic father in Mississippi whose child could have been screened and wasn't screened and he goes to the Mississippi legislature and says, "For God's sake, we have to screen," and they passed one of these acts I believe named after the poor child.

And the trouble with this is that this is the way that we make all kinds of decisions about policy, from a very one-sided kind of perspective without looking at what the costs of what we're doing are.

And it happens in at least two kinds of ways. One of them is the way that Rebecca knows more about than I do. The amount that is spent on research depends in significant part on how successful the patient advocacy groups in that area are, leading to some very strange proportions in amounts spent on research.

The other way in which we systematically distort decision-making is that we appoint agencies to be responsible for worrying about some aspect of health care. So you have HHS, which has an agency which cares only about health care privacy, and they issue regulations intended to maximize health care privacy in ways that seem quite uninterested in the costs of the operation. We have another agency, OHRP, which is responsible for, as they see it, protecting subjects of human subject research and only doing that, whatever harm that may do to useful research.

So I agree with Rebecca that this looks in many ways like a small part of a much larger irrationality in the way that we make health care decisions in areas related to the kind of things that the Council is worried about.

CHAIRMAN PELLEGRINO: Thank you, Carl. Ben? Dr. Carson?

DR. CARSON: Well, you know, I think obviously we're only in the infancy when it comes to these screening techniques and the things that we can screen for. So this is certainly not something that's going to go away in the future no matter what we say.

You know, I like to think in terms of analogies, to put things in clear perspective. And, you know, within five years there's a very strong chance that one or more of us sitting at this table will be dead. Now, would you like to know if it's you and when you're going to die? You know, how would that change your life?

Now, some people would say, "Yes, I'd like to know exactly when that's going to be, because, you know, it would certainly change the way that I did things." Some people would say, "That's the last thing I want to know." So I'm not sure that that's a moral or ethical issue, because it's going to affect different people in different ways.

And I guess the real issue is how can or whether we can actually regulate the way that the information is used, because the information is going to be out there no matter what we say.

CHAIRMAN PELLEGRINO: Thank you, Ben. Bill? Dr. Hurlbut?

DR. HURLBUT: Floyd, I agreed with quite a bit of what you said in a broad sense, but did I understand that you feel as though eventually we should have a uniform national policy of sequencing the whole genome for each newborn?

DR. BLOOM: Well, that's what I was implying and I think that's where the future is taking us, but it doesn't necessarily have to be a federally or a state supported system that will do that, because as this month's issue of Nature Medicine indicates there are already three very thriving firms offering to do that for individuals at any age.

But I think ultimately if we consider what's wrong with our current health care system and try to implement something along the lines of prevention rather than waiting until the disease happens, we're going to need to have that information as early in the life course as possible in order to understand how best to go about the possibilities of prevention.

DR. HURLBUT: Well, that's a good answer, and it's your latter sentence that I think is something we should pay attention to, because why would it be a newborn. If it's early in the life cycle as possible, why would it not be prenatal. And you actually mentioned in your opening comments a pregnancy-long education process. How about one that's informed with early testing?

And as probably all of you know there are advances being made in taking the peripheral blood from the mother and detecting either DNA fragments or even fetal cells. So this may not be invasive and not carry any risks.

There are some troubling dimensions to this, however, and I think they could be included properly in our report. I agree that the thousand-dollar genome is imminent and I think sooner than most people are — even professional publications are stating. And maybe then it would go down to the — who knows, maybe the hundred-dollar genome eventually.

And if I understand it right, the tests currently cost about $70. Is that what was implied in our report, Adam? The mandatory screening that's currently in place in 49 states, roughly $70, $100?

DR. SCHULMAN: I think that's the right ballpark, but I'm not certain.

DR. HURLBUT: Okay, first statement — you must have this somewhere in your report already, but you should remember that's a huge amount of money — I mean, if, what are there, 4 or 5 million births a year in America. If it's a thousand-dollar genome, as you suggested, that would be 4 or 5 billion dollars a year. That's a significant amount of money to work toward cures and who knows what information we'd get from it.

But there are several things I'd like to say over the course of the discussion, but so that I get right to the heart if it is, do you think, Floyd, that it should be a mandatory — ideally you'd have that a mandatory approach?

DR. BLOOM: What I said was that I agreed with Bailey 's statement that if it was beyond the benefit of the child being screened that parental consent should be required and that the results should be kept confidential. And that would be along the lines of the IRB currently allowing for research on blood blots in an anonymized fashion.

DR. HURLBUT: And benefits to the child being a direct medical treatment or knowledge that the parents would have which would be preventive or some statistical possibility of the emergence of the disease? I mean, you know as well I do, knowing the science, that this kind of information that you'll get from a thousand-dollar genome, especially in the early decades, will be framed in statistical terms.

Some of the statistics will be hard for even the most informed scientists and physicians to understand and that's going to put an enormous burden on the average person in terms of what has been called toxic knowledge, information they simply don't know how to process no matter how much education you give them. Maybe we should just speak to those issues a little bit.

It seems to me this is what we're supposed to do as a Council is to talk about it no matter how we feel about it, but since you think this is a good idea, maybe you should address some of those questions.

DR. BLOOM: Well, calling it toxic knowledge already sets it up in a context that I'm not sure I agree with. We've have that kind of knowledge that — right now people with the Huntington's disease gene may or may not pose the same question that Ben raised earlier. Nancy Wexler, who talked to us three or four meetings ago, has a wonderful story that she often talks about of children who refused to be tested because they were sure they were going to get it and led their lives in a way that they later regretted because they didn't have the gene and mothers who have the gene aborting early fetuses and then deciding they didn't care anymore. So that toxic knowledge has been with us for a long time.

The Tay-Sachs disease gene in the Ashkenazi community was seen as toxic in the beginning, but the community rose to the occasion and now Tay-Sachs disease amongst Jews is extremely low in incidence. So I think the community has to be brought along.

We're not going to be able to deny the knowledge exists. And complex genetic disorders are going to be the mainstay of the kinds of diseases that Paul and I have been concerned with for our entire careers. And I don't see a better way to get at that knowledge than having the genetic sequence information as early as possible in the disease course. That doesn't mean it's going to be implemented in time to help my grandchildren, but my grandchildren's grandchildren will benefit from that.

DR. HURLBUT: I certainly didn't mean to imply that I thought this all was toxic knowledge. I just meant that that dimension for which the average person can't assimilate, that becomes to that person a burden, that we should address the issue of that, I think, because beyond the difficulty of dealing with false positives or statistical probabilities that are hard to explain — and, by the way, how far would you take it? Would you do not just the genome, but the epigenome also?

DR. BLOOM: It's not a slope on which I'm willing to put my feet.

CHAIRMAN PELLEGRINO: Dr. Schaub.

DR. SCHAUB: Yeah, just a question for Floyd. I initially thought that we were pretty far apart on the spectrum on this one, but I'm not actually so sure that we are, because you spoke quite favorably of this notion of having pilot programs and parental consent.

So, I mean, would you be in favor of the mandatory program, the state-run program, operating according to the original principle of screen only if you can treat and then having a sort of second tier program that could operate according to a different principle and screen for everything, but that would require parental consent and all of the sort of educational framework that would have to go with that?

So, Carl, you suggested that there had been, you know, a suggestion floated that we just operate according to some monolithic principle. In fact, I think that's not at all what I was suggesting, but that you could have a kind of two-tiered program that would take proper account of when consent should be sought.

DR. BLOOM: I'm in favor of two tiers, but I'm also in favor of looking beyond where we are now to a much more complete, comprehensive, accurate, and sensitive profiling when DNA testing becomes the mainstream, rather than tandem mass spec or other direct measurements of abnormal metabolites.

And I would assume that the ACMG will continue to evaluate the state of the testing arts and the opportunities for the future so that the current panel, even though it has things that may not benefit the person being screened, will inform medical research. And that's the angle that I would like to see. I am not in favor of screen only if you can treat, because what I really want to get at are the ones that we can't treat today.

DR. SCHAUB: But do you think that when you go beyond that screen-only-if-you-can-treat, you must secure parental consent or not?

DR. BLOOM: I agreed with the Bailey position on informed consent if it goes beyond the benefit of the child being screened.

CHAIRMAN PELLEGRINO: Dr. Meilaender. Excuse me. Diana, finished? Dr. Gil Meilaender.

PROF. MEILAENDER: As I listen to our discussion, it strikes me that in certain ways a more interesting question has emerged than just the question of this newborn screening policy. I think this is significant, though I do take Floyd's point that if 49 states have done this, we might be thought to be sort of arriving a little late on the scene.

That doesn't mean that it's not worth rethinking. It may well be worth rethinking, but there is a concern there. But the larger point — and maybe somehow — I mean, it doesn't mean that we can't do this, but we need to set this focused discussion into the context of a larger point that has to do with the purposes for which one seeks knowledge.

If I'm a researcher — which I'm not, of course — I suppose the more knowledge, the better. Even if I see absolutely no possible use for that knowledge right now, it's useful to have, who knows what may come of it.

If I'm a patient or even just a potential patient or the parent of a very little patient, the more knowledge is not necessarily always the better. This is a problem. There may be a lot of things I'd just as soon not know along the way because I can't process them or I've got nothing to do with them and so forth.

And if this problem is buried in the newborn screening issue here, the various comments people have made suggest that it's a problem that is only going to grow enormously over the next few decades, and so we might not be coming on the scene too late at all if we couch this in a way that not only deals with this focused issue of newborn screening, but tries to say something — I mean, we have to think about what exactly there is useful to say, but tries to say something about a certain kind of tension between what patients or potential patients want and need as knowledge and what research needs and how one sorts that out. I mean, I think if we do something with that larger issue, we might be able to set this in a context that would be quite useful.

CHAIRMAN PELLEGRINO: Thank you, Gil. Dr. Dresser?

DR. DRESSER: Carl, I don't mean to put you on the spot, but I remember you did some work on prostate cancer screening and about the attitude that patients had toward it when sort of perhaps from a more objective viewpoint the value of the knowledge was questionable, but the way that the patients felt about it was different. So maybe that would be useful to share with us.

CHAIRMAN PELLEGRINO: Carl.

PROF. SCHNEIDER: It at least speaks, I think, to the idea that in some circumstances getting the informed consent of the parents for this kind of screening would be a useful thing. It strikes me as very unlikely that you will actually be getting informed consent from parents if you present them with the form and ask them to sign it or even if you try to explain it.

The study that Rebecca was talking about was 40 men in Ann Arbor, and we spent — a doctor and I spent as long as needed to give them the information that they needed to decide whether to be screened using the PSA test for prostate cancer. And we worked in a way that no physician would ever be able to work with a patient, and then we would ask them, do you want to be screened.

And either answer, of course, was perfectly correct. Nobody could agree on whether the screening was a good thing. That's why the official guidelines always have punted this to the patient and to the doctor. The answers we got revealed that the hour and a half or so that we would sometimes spend had been time wasted, because they responded to the question by consulting assumptions in what I called folk wisdom that they had, like, “it is always better to prevent a disease than to have to treat it,” which is no doubt true, but screening doesn't prevent diseases.

The thing that came easily to their minds was this principle of the American Cancer Society that they applied in ways that we didn't anticipate and understand. More broadly — and there were lots of these pieces of folk wisdom that they used, like, "Well, the PSA test may not be really good, but it's the most recent thing and you should always use the most recent thing."

The literature on informed consent is massive, and it repeatedly, invariably suggests that if the goal is really to give patients information so that they can make a well based medical decision, the success you have in communicating the facts runs somewhere between about a third and a half if the answer is correct.

And here you have parents, very recent parents, and what you're presumably trying to do medically is to help them deal with their child as well as possible. And I think a decision needs to be made about how much of that — of the scarce educational energy that you have for dealing with these people you want to spend on pretending to inform them about the screening choice and how much time it would be better to spend on things that would probably do a whole lot more good for a whole lot more children a whole lot more quickly.

CHAIRMAN PELLEGRINO: Thank you. Peter? Peter Lawler.

DR. LAWLER: Right. This has been a fascinating conversation going well beyond the scope of the report, but I just think from the point of view of the parent because, like you all, I can't think from the point of view of the researcher, particularly — that, of course, a parent would want to know about specific diseases that your kid has that could be treated. This doesn't seem controversial.

But when you talk about the more comprehensive knowledge that will soon be available that Floyd was talking about, a parent would be presented with a whole bunch of statistical probabilities or risk factors. And this might, in fact, as has been said, be way too much knowledge, turning preventative medicine into indiscriminate paranoia, like "You don't get dessert because you have a slightly better than average chance of getting hypertension."

And so preventative medicine is good, but this explosion of information presented as statistical probabilities a parent might not, in fact, want because prevention could turn into paranoia. But, in fact, how could you turn this down if it were available. It would seem irresponsible.

So that leads to all the things Carl was talking about in terms of informed consent. It would be very hard, in fact, to say no, and it would be very hard, in fact, to know enough to know whether you should say no.

So, in fact, the question of informed consent is a big issue, the issue of the explosion of information and kind of — which will seem like quasi-deterministic information that, you know, you'll know what's going to happen in advance.

And even though it's not really that, as was pointed out, it will seem like that to the parent, that, in fact, I tend to agree that we will not prevent people — be able to prevent people from being burdened with this information if it's available at a relative low cost.

And so there are all kinds of interesting psychological issues there about whether it's better to know all that much. And is there really an ethical and public policy issue — will we be able to withhold this information effectively from people; will the very idea of consent really mean anything given that it will seem irresponsible to turn it down. And then I can go on, as Bill wants to, to talk about how all these issues are enhanced or inflamed once you get into the prenatal area, but I won't.

CHAIRMAN PELLEGRINO: Thank you, Gil. Peter, further comments? Janet?

DR. ROWLEY: I don't know that I have anything very profound to say. I can speak from somebody who's been involved in genetics, at least as related to cancer and as somebody who does research, that I think that one of the points that Floyd made in terms of being able to advance our knowledge and ultimately to benefit patients is an important consideration.

And it is true that in mass spec analysis you can do whole genome-wide mass spec. So you're looking at all the proteins, whether they're the ones you're interested in or not. And if you find an unusual pattern that keeps repeating — which, of course, is difficult in rare diseases. It could just be a polymorphism.

But if enough of them are pooled together, you then can both find diseases, presumably many of them of genetic origin, but you also can have individuals who are knowledgeable and interested in that particular metabolic pathway involved in trying to figure out both what the errors are, but also then what the possible treatment is.

So you can say, well, this is knowledge for knowledge's sake or research for research's sake, but I think that's how much of — many of our discoveries have been made just by following that particular pathway. So I think that only screening for treatable diseases is too narrow a focus because what's treatable today or what's not treatable today may well be treatable tomorrow.

And particularly with the recent discussion here on informed consent, is doing a mass spec twice on a sample and only looking for defined things that you know about in the first sample and then looking at everything the second time. Firstly, you may not have enough sample. Secondly, it's at least twice as expensive as it would be otherwise.

And I think we're all brought up to say, yes, we're all in favor of informed consent, but as a practical matter, I'm not so sure that it's really the critical issue. I think, not to misuse any genetic information that is obtained is the critical issue and one hopes that the legislation that has recently been passed will deal at least with some aspects of that.

But just think logistically. If you say you're only going to screen for diseases that are treatable and in five-years ' time that number is doubled, are you going back to the legislature and say, "Well, now we can treat this, so now it should be mandatory, not voluntary."

I think that we have to put some reasonableness in the kinds of recommendations that we make. And I do think that we have something to say as a Council, if as Gil has been suggesting, it is expanded or at least in, say, the last chapter it's pointed out that many of the considerations are applicable to a far wider population, then that would be a sensible thing to do.

CHAIRMAN PELLEGRINO: Thank you, Janet. I have Paul McHugh and then Bill Hurlbut.

DR. HURLBUT: Could I ask a question of Janet?

CHAIRMAN PELLEGRINO: Relevant? Yes, go ahead.

DR. HURLBUT: As a point of clarification, Janet, and for information for our Council record, would it be more meaningful in terms of the value of information to have a test of all the proteins and can you, in fact, with mass spectrometry actually look at a whole view, essentially like the equivalent of a genome-wide expression? Can you look at, what is it, ten thousand proteins or so forth. And, if so, is that information reliable or does it sequence through cycles that make it less information-rich and how much would it cost and when would you do this in the newborn period?

DR. ROWLEY: Well, my understanding is that the tests currently are using mass spec, and I don't know how many proteins are analyzed. I know that for our research purposes in leukemia, we're proposing to do genome-wide screening, which — of proteins. So it's whole cell protein analysis.

And it's extremely expensive, but it's also new, and there are very few companies that you can get to do this. And if you really did it on a larger scale, then the efficiencies and the economy of scale would come in.

And you're not looking at proteins. You're looking at peptides. And at least this is — I'm so far out of my field that I shouldn't be saying this, but it's my impression that you look at the peptides and then you know which peptides you expect to be in which proteins and which amounts and with the controls, you can see what appears to be aberrant.

CHAIRMAN PELLEGRINO: Paul McHugh?

DR. McHUGH: Well, I also want to begin by thanking the office for the report. It was wonderful and very informative. And it spoke a bit to my conflicts, and I'm deeply conflicted in this arena in two ways.

First of all, I believe that the conditions that I study, in particular, the ones that emerge in early adulthood and challenge the rest of the life of those people will need us to understand them earlier in order for us to develop appropriate work for them and to understand what the mechanisms of their conditions are and the things which prevent and enhance it. So I'm in that area.

I also, of course, am a person who informs people of them carrying a particular gene, and if you work in a Huntington 's center like I do and have the problem of telling somebody this kind of bad news, you really know in the hardest kind of way what effects it will have on them.

So when it comes, therefore, to this area of infant information, I want the information as an investigator and very much worry about the information as a doctor and as a person caring for these people.

And what I liked particularly about the report was that it was emphasizing for everyone that there's a transformation of moral custom here if this new method comes into play. That's all I think we have to do for the public is to say, something has been transformed and it's important for you to know about it.

Then I was delighted with what Floyd said about, "Gosh, we're playing catch-up here a little bit. After all 49 states have done this." But I wouldn't worry too much about that. Forty-nine states are a lot of states, but I think it was 32 states that agreed that there should be involuntary sterilization of people who they believed at that time could be, as Oliver Wendell Holmes was saying, "Three generations of imbeciles is enough."

So the states do these things prompted not by careful thought about the moral transformations, but they do it in relationship to the bits and pieces of information they get from so-called experts — or true experts and the like — who become focused on what they do like I could be.

So I'm very pleased with the report and I'm looking forward to having an ongoing conversation like this from different perspectives as it needs to be when moral issues conflict as they do for me, personally.

CHAIRMAN PELLEGRINO: Thank you very much, Paul. Carl Schneider.

PROF. SCHNEIDER: I would be helped if the report could — and if anybody here could help me understand what kinds of costs we're talking about here. I can easily be persuaded that it is useful in terms of research to collect this kind of information, even if it doesn't go to parents. None of that bothers me very much.

But we happen to be talking about this area. We happen to be able to learn something by studying this area, but is this actually a good expenditure of our resources? Is the margin — if you start mandatory screening for a few things where you really believe that it's cost effective, is the marginal cost of screening for everything else so low that it simply doesn't matter, or do the kinds of cost the report does talk about eventually become so great that you'd really have to get quite a large return on your investment in order to make it worthwhile. So I'm interested in the cost/benefit question here and quite confused about it at the moment.

CHAIRMAN PELLEGRINO: Thank you, Carl. I think Dr. Davis would like to pose a question.

DR. DAVIS: I'll only do so after the Council is concluded. Has everyone commented?

PROF. MEILAENDER: I just wanted to add to Carl something that I'm not entirely clear about. You said — you referred to the use of "our resources." And I'm not sure whose resources. I mean, my understanding is some of this is publicly funded and some is not. That might make a difference to me, sort of, in what I think about it. So a little more clarity on that would be good, too.

CHAIRMAN PELLEGRINO: I have Professor Gómez-Lobo and then I have Rebecca Dresser. Did I see your hand flick up here, Floyd? Okay.

DR. GÓMEZ-LOBO: This is sort of a comment from someone looking at the earth from the moon roughly, because, of course, I'm not in this field, but it seems to me that if I try to reflect on the bioethical issues involved, I see that there's screening in three different situations — screenings for conditions that we can do something about; screening for conditions that we cannot do anything yet; and then general scientific knowledge, which, of course, at some point may become useful or not.

And I see the drawbacks or the negatives in a limited fashion. Maybe I'm mistaken on this. I see that with informed consent a lot of these things could be done. And I'm not so sure about the toxic knowledge argument. I think that I'm inclined to say most knowledge is good, and it becomes toxic in very particular circumstances. And I'm not sure it should be a very weighty consideration in public policy whether some people might — or for some people the knowledge might be toxic.

So my last question would be to Diana, but I think we're very close to each other now, is under what conditions would you accept a shift to the new principle? And in a way it seems to me that you have already accepted this by speaking of the two-tier approach. But that would be my view. I think that from a bioethical point of view most of the arguments should be taken to really favor massive newborn screening.

CHAIRMAN PELLEGRINO: Diana, did you want to comment? Dr. Dresser is next.

DR. DRESSER: I wanted to talk about if we have a two-tier system in the mandatory part where it sounds as though we're going to say there should be benefit to the child or — I don't know if we're going to say it should be, but that that's traditionally been the goal — how do things like — and they'll have to make decisions about what to look for in the future. So what about late onset diseases — APOE4, Huntington 's.

As these things become easy to find, is this something that should be included in the panel and how — if it's pretty much done without parental consent, what are you going to say to parents about this kind of thing?

There is today this therapeutic gap they talk about where we can know about a predisposition, but really not do anything about it or in some cases — say, a predisposition to obesity or addictive behavior — alcoholism, abuse of something — okay, well, what effect is that going to have on people to know about that.

You know, we already know we shouldn't smoke and drink too much and all that. So this discussion of if — even if we do rest mandatory screening on the notion of benefit to the child, how should that be interpreted in the future. What kind of evidence of benefit, what kind of benefit, would be justified as a sort of a tipping point before — you know, to have it included in the screening.

And then for the research consent, if it's just a matter of saying, well, it's okay with me to have my child's blood sample used in research for the future benefit of kids in the future and there's no coming back to me or my child with information and no linking of identity, I'm not so worried about how well informed they are about that choice. I think that that could be a pretty simple choice.

Then if it's something where they're going to want to come back and find the child and look at medical records, well, that's a different level, so maybe there should be more informed consent there or that people should understand that this could mean information about your child's health status and could have an effect on employment and so forth, confidentiality is important and all that. So I guess those are just some nuances about a two-tier system that I think should be at least mentioned.

CHAIRMAN PELLEGRINO: Dr. Davis, your comment.

DR. LAWLER: Very quickly, after listening to Rebecca, I think there is a non-trivial argument for no mandatory screening, in fact, that informed consent should govern it all. Parents should have the option of opting out precisely because of the slippery slope from prevention to predisposition and so forth.

So is there anyone out there defending that now, that there should be no mandatory screening at all. I mean, parents should be encouraged and so forth, but they should be able to opt out in a free country.

CHAIRMAN PELLEGRINO: Dan?

DR. DAVIS: Okay, just looking ahead very concretely to next steps, we do have one proposal on the table from Professor Meilaender about a more substantive and that is looking at the broader question of knowledge. Is there general agreement within the Council to do that?

We did have an earlier version that did that and so it would not take much to resuscitate that and bring that forward into this new plan, but just for the staff's benefit, is there general agreement that we should make that kind of revision? Okay. There have been a number of smaller suggestions I think that we can incorporate, but that will require a bit of rewriting.

CHAIRMAN PELLEGRINO: Floyd?

DR. BLOOM: Well, if we did that, which I would favor, there is now a growing body of experience and data from the Icelandic DeCODE Study where the general population all volunteered to have their genomes analyzed. And the results of that analysis could be informative as to what we would do.

CHAIRMAN PELLEGRINO: And that's been in process for several years, hasn't it, Floyd?

Any other comments? We have some time. Do you want to respond, Adam?

DR. SCHULMAN: We did do some research on the experience of other countries with large-scale biobanking, including the Iceland case. And it's an interesting and complicated case, which is largely defunct at the moment because the Iceland Supreme Court decided that there were too many invasions of privacy involved.

And so it's a complicated situation where the country seemed very enthusiastic at first about compiling this information, but there were reservations expressed afterward. But we have a project ongoing that will be featured in this report about biobanking and the challenges of preserving privacy and consent while making maximum use of the data gathered.

CHAIRMAN PELLEGRINO: Bill Hurlbut and then Carl, and those will be the last — and Diana. Sorry.

DR. HURLBUT: I favor the expansion of the scope of the report as mentioned, and I think what we ought to do is center it around the question of the principle that governs the testing, which, whether or not direct therapeutic impact is the principle. I think you've done that in your staff paper today.

But I also think we should take seriously the troubling criticisms in the Moyer article. Did you guys follow up with those criticisms directly with anybody from the group that issued the study? What was it called? The College of —

DR. ROWLEY: The American College of Medical Genetics.

DR. HURLBUT: The American College of Medical Genetics. I mean, the Moyer article raises some troubling criticisms, and as Floyd says, they were themselves not exactly evidence-based in the article, although they may very well be. They may not have had space for what they intended.

But a secondary thing I think we should address besides the principle is the effect. And there I think we should take seriously the fact of when patients, the general population, hears a scientific statement, they don't necessarily have an easy time digesting it.

And we tend to hear things, and there are a lot of psychological studies that would confirm this. We hear things not as objective data-receiving machines, but as human beings with a weighted sense of significance.

And in the Moyer article they mention the effect of information concerning sickle cell anemia and the failure of large numbers of people to act on even very obvious information. So I know personally of cases where people have received prenatal diagnosis information where they've completely misunderstood it, and these were reasonably educated people.

And the burden of worry — converting pregnancy into nine months of worry is really something we should take seriously. Of course, we're talking about postnatal, newborn screening, but I think it's very likely this will extend itself, and therefore I agree with Gil, we should address the whole spectrum of this, as well as the practical impact on patients and the practical meanings of cost and follow-up, and the seriousness of this issue is quite deep, I think; whereas I want to also reaffirm that I agree with Floyd completely, that this will yield really wonderful, valuable information.

CHAIRMAN PELLEGRINO: Paul?

PROF. SCHNEIDER: I just have a quick question. You said that there was going to be a discussion somewhere of biobanks and privacy and is that to be in this report or in another one?

DR. SCHULMANOF: Biobanks come up in the third chapter, which looks largely to the future, in part, just because in this country they're really only being done on a limited basis, but there is discussion of nationwide large population studies and we will be going into that in the third chapter.

CHAIRMAN PELLEGRINO: Diana?

DR. SCHAUB: Bill 's comment took care of what I wanted to bring up. Thanks.

CHAIRMAN PELLEGRINO: Thank you. Well, let me thank all of the Council members. Each and every one of you participated in this discussion. You revealed the complexity of the issue. I think we all know that this movement is going ahead, and I think it's important that Council provide a systematic and orderly look at some of the issues.

It's clear that there isn't entire agreement on how we should go, but I think it's appropriate at this time, and as you all know, that you have the opportunity to provide an individual assessment, a personal contribution, to the issue and I would like to invite you to do that. As you look at this again, if you feel it should be added.

We're not going to achieve a consensus on every item — we all know that — but I think it's important for the Council at this point to say, "This is the state of the question" that the public can look at and can reflect upon and we know that things are going to change, but this is the present state. And I thank you all again very, very much, and especially Adam and Sam. We now have a break until 10:30.

SESSION 2: ETHICAL UESTIONS IN THE REFORM OF HEALTH AND MEDICAL CARE

CHAIRMAN PELLEGRINO: Thank you all for reappearing on time, Council members. This morning we're going to pick up a discussion the Council has been in the process of listening to, going through, thinking about for about a year and a half from a variety of different experts in the field generally proposing some system or another for the solution of the problem — or let us say, the question that has had increasing attention in the past year and certainly will be one of the prime domestic issues in the new administration, unless we're vastly wrong.

My task this morning is not to bring you a revelation or a series of tablets from the mount, but rather to open up the discussion and once again ask you, as you did so well in this morning's discussion, your comments, your directions on how we should go.

I have two fundamental questions to put before you and then a little bit of an introduction. The two questions we'd like to have you address are: should we pursue this subject further? And if we do so, how can the Council, given its charter and its general direction up to this point, best contribute to what is a very, very complicated and at times a vexed debate?

Up to this point I think — the impression I get — and I may be wrong — is that most Council members do not have a strong desire to get into the middle of the discussion about which program or remedy is the better or the best, to decide on one or the other. My guess would be that the opportunity to come to agreement on that question would be extraordinarily difficult and may well be beyond the expertise of some of us, including myself, certainly.

But the other way in which we could contribute is one, I think, that fits into our charter. What are the ethical issues, if any — because some doubt that there are such. What are the ethical issues of importance to public policy — in a sense before those policies are made, at least concurrently with them, and important, certainly, once a program is decided upon in how we evaluate that program from the point of view of its end and its purpose? [How do we determine] which is to be of use and help to the people of the United States, particularly those who lack easy access at the present time, those who are ill and aren't getting care? …{ I]n a way then, we'll be talking about two things, although everybody puts them together — medical care, which in a way is in the category rescue operations, human beings suffering, needing our help and, in addition to that, of course, health care, which is more a question of cultivating health, improving quality of life, and adding preventative medicine to the roster of things that should be supported in one way or another.

The arguments have always vacillated back and forth from the point of view of whether government, private mechanisms, or some combination thereof is best. And I would say most of the programs presented to us today fall in one of those three categories.

I would like to say a few words about what I think can be our contribution as an ethics Council, and that is to examine what the ethical issues are or would be, whether we think there are any, how we think they should be phrased, in what order, and so on.

I invite your input as you have provided it so well this morning so that those who are preparing this particular document for your consideration can get guidance. What has been done is a first part of such an approach, and that is providing the background information, reviewing a little bit of the history and something of the content of the various proposals. This in response to a request that Paul McHugh made some meetings ago to get a better grasp of what the debate is all about. And I hope I've said it correctly, Paul.

And we thought that was an important question. So we believe the first part does some of that. You have received that and already have it in your hands.

We plan to move in the following way: to take what you will be saying today, to roll it into the second part, which is: are there ethical issues and can this Council contribute in a constructive way, not by issuing apodictic statements about right and wrong, good and bad, but examining the questions of right and wrong, good and bad as they come out of a new program from this old program so that the public will have some guidance in what our issues may be. That clearly and simply is a proposal of what we'll be doing.

If I can belabor your patience just a few moments more — and I do mean a few moments because the new system of keeping your finger on the pedal while you're talking the may exhaust my energy requirements and all my phosphorylation processes may not be as efficient as they were 88 years ago. But in any case, there's enough left to keep the finger going for a little while.

What I'd like to do is list for you, if I might, again not to be included in any report unless they're kinds of things you think are useful or worthwhile, but the questions are most often posted and presented to me when I discuss this issue. I make no apologies. The reasons I get these so-called ethical questions — and I think they are ethical questions — is because I have a tendency to say that what we have never discussed in the 100-year debate over health care and medical care — it's 100 years — 1915, the American Association for Labor Legislation made its first proposal of an insurance system, and it was rejected roundly by objections from the AMA, objections from labor, from business interests, and so on.

Since then — and this is the subject of this morning; therefore, I can only mention it — there have been, as you know, oscillations between these various mechanisms, but I don't want to get into the mechanisms. But in each case there have been ethical questions. I've raised them, and I'm not going to give you a speech or exhortation on the way you should go.

I think one of the first questions — and these are the ones that were presented to me, remember, now. It's an unofficial survey with absolutely no statistical power, I assure you. But it does impel me to think about it.

First, why is it an ethical issue? Many, many people think it is primarily an economic issue, a sociological issue, a partisan issue, but I think primarily it can be for some an ethical issue. Why? For the very simple reason that it deals with human beings and what happens to human beings by decisions made by those… who make policy.

What's the impact on human beings? And when you're talking about something that needs to be financed one way or another and you talk about the kinds of things that are being proposed, you're dealing with conflicts of interest — conflicts of interest between those who are ill and desperately need help and those, on the other hand, who are not in that state and who are in a better state financially and so on, and for them it's a non-existent problem.

But if a policy steps into this and attempts to manipulate a little in the direction in the one or the other, there's a conflict of interest. Human beings — some human beings are being asked to make a sacrifice for other human beings.

I'm not here to discuss how one looks at this ethically, but rather [to state that] it is an ethical [issue]. In my own opinion, [reflection on] the ethical issues ought to precede the economic and political science prestidigitation for the new program, precede not in the sense of saying this is the better mechanism, that's a scientific question ( if economics is a science and many believe it is), or [a question of] sociology. That's a question which the ethicist doesn't look at.

The ethicist does look at the impact, the effect of what is a scientific decision on human beings in the vulnerable state of illness or in the vulnerable state of being on the margin of society or whatever it happens to be. Notice we're not talking here at the moment about people who are able to take care of themselves.

The second question ethically is, who is responsible for one's health? Many would hold very strenuously, it's the individual. Why does society or anyone else have to worry about that. And others on the other side would say, no, it's in the interests of the common good to have people who are ill and not able to flourish or not able to participate or on the margin. It reflects something about the kind of society.

Those are ethical questions. I'm not answering those questions, but the questions were posed to me, which I freely answer when I'm debating it. I'm not doing that now.

Another question is if there is an ethical issue, then how does it relate to the economic question, because obviously this is a matter of economic science and some would say, well, the ethical consideration should judge, evaluate the proposal and therefore the evaluation of the proposal is not just scientific. It's not just the question of how it works, but does it achieve its end — the improvement of the health of those who need it, rescue operation, or improves it for those who are not ill at the present time.

So I think without going any further, and I can do more, there are ethical questions in the minds of many people, and therefore it is not something that can be simply brushed away. In that argument there comes a serious question of whether or not health care should be treated as a commodity — that is to say, that its place, its quality, should be left to the operations of the free market.

Some people would say, yes, and those, and there are many of them, whose own interests would be violated by some program that did not rest on privatization. And so another ethical issue you have, as I said earlier, is a conflict of obligations and a conflict self-interest with something that transcends self-interest. These are ethical questions. That's all I'm trying to establish. Is it a commodity, or if it isn't, what kind of an entity is it?

Is medical knowledge a proprietary instrument that the doctor owns or the institution owns. Can he therefore — or she therefore — distribute it as he or she wishes. We have those who say that that is the case, that no one can say how we should distribute our capacity and our knowledge.

There are others who say, "Oh, no, wait a minute. Where did you get this medical knowledge? Oh, we know you paid your medical school tuition, but you dipped into 3,000 years of information. Those of us who are clinicians, like myself, have drawn on clinical observations of 3,000 years old, perhaps older than that.

We have, by the way, altered them in the light of certain new developments, but the point is, we have access to those developments, and most of those who paid for them came out of public funds. The NIH has done a beautiful job of philanthropy. They are not funds they themselves have invested to get a return.

So save your comments, Bill. We'll be glad to hear them later.

How, therefore, can we look at possession and proprietorship of medical knowledge. Am I my brother's keeper? someone has asked. Even my foolish brother? Don't we do harm to people by helping them in those circumstances? Don't we inhibit self-reliance, don't we reward sloppy planning, et cetera, et cetera. Those questions arise. They're ethical questions.

What kind of a society do we want to be? Do the values that are reflected in the way we have organized and deliver this element of the flourishing of human beings, namely their capacity to function and be free as possible, obviously with the limitations of our mortality. And what can we do to help under those circumstances? Are we emboldened to do so, and does the way we handle it reflect on a society that in some ways has closed out an aspect of human existence and humanity itself.

By what criteria, can we study and examine the proposed programs? And we'll hear about some this afternoon again. We've heard many, as I said, in a year and a half. One way surely is their efficiency, their productivity, their cost, their value, but another one is does it do the job? Does it achieve what we're trying to achieve with it? Is it contrary to or enhancing the well-being of human beings?

Is health and medical care an obligation for society? What is a good society? You know, when you look for a definition of common good in most contemporary bioethics texts, you find very, very little. It's an ancient concept. It doesn't get much attention.

But think about that. Are we not all in some sense diminished — an ethical question. Of course, all of these ethical questions, like the ones you discussed this morning, have an empirical foundation and any talk about ethics needs to be secure in the empirical foundation.

I have to repeat over and over and over again in my teaching of bedside ethics, do you have the facts straight before we start talking about what's right and wrong, good and bad. And I think there's a paucity of facts that are irrelevant to the ethical issues.

Well, I could go on and on. You can see the drift of my questions. I simply wanted to ask you to think about the ethical questions. Are there ethical questions? What are some of those ethical questions? And get your input for the members of the staff who will be drafting the second half of the report, the first half of which you've already received. And we urge you, each of you, to write, comment here, of course. We only have a short period of time, but write to us your impression of it. You are citizens of the United States, too. How do you see it?

Let me say that this has never appeared, really, in the public debate in 100 years. Yes, there have been efforts here and there, and I think — this will be my closing statement. I think that this Council, in keeping with its charter to examine the ethical issues in public policy, does have a responsibility to look at this one. I stand to be overruled, obviously, but I believe that and I think that we could make a contribution. Just as in your last discussion, not the final, absolute, total answer to everything, but rather what is the state of the question now.

No matter whether you think it's an ethical issue or not, there are enough people who are asking these questions, believe me. I'm besieged by them — enough people who would like some guidance in what is the state of the questions, what are the pros and the cons. And that leads me to a final footnote.

My efforts since becoming chairman have been to draw from you what your thoughts are. And I've always hesitated to say what I think because I think it should be a reflection of what the group looks at and thinks, and they've been tremendously helpful.

But at this point I thought I'd interject just a little bit of a — what we call in physiology, the vis a tergo — forgive me for the Latin — the force from behind. We're talking about the pumping action of the heart that pushes the blood throughout the body. And I think the ethics may be the vis a tergo. Thank you.

Carl, you look like you're ready.

DR. SCHNEIDER: After that genuinely inspiring introduction, to have nobody say anything would be too horrible. Let me just start by asking a question that I've asked before and don't really feel that I've understood the answer to. For whom are we writing?

I sometimes think I'm the only person in America who has actually read many of the reports of the Councils that preceded us. It's a long, hard slog, and I think there are very few sophisticated Americans who will have read any of those reports.

We keep saying we're speaking to the American people and helping them to understand important questions. It sort of reminds me of what somebody said to Gibbon — "Scribble, scribble, scribble, another great fat book, eh, Mr. Gibbon " Who is actually going to read these things?

CHAIRMAN PELLEGRINO: Well, Carl, I think that I happen to have a strong belief in the fact that if one addresses issues with clarity and brevity, not from the point of view of saying "This is what you must do, but here are the issues you ought think about," — I think a lot of people read those kinds of things.

And I think our dignity report tried to raise that question to the dissatisfaction of some and the satisfaction of others, and that's the way it is. And I think when you complete the documents you were talking about this morning on something which is a reality and is moving along, there's no question there's going to mass screening, they will have a basis for thinking about it.

Now, whether the people who read all the newspapers or see certain TV shows will read it, I don't know, but I do think thinking people who have an opportunity to influence the communities in which they live would read it. I'm surprised at how many people do tell me they have read the reports of the Council, the previous reports, and find them helpful.

So my answer is I don't have numbers to give you, and the other side of it, what is the fate of any government report? People have a certain allergy, right? There are endless, infinite numbers of shelves with dusty books on them, and we may join that generation.

But I think that we can't give up the effort of trying to influence, and I think the answer lies in how we write them and clarity and order that we move. I guess not many people agree with me, but …I do think that people appreciate having it laid out for them.

I don't know how many times I've been told the stem cell volume was an extremely valuable volume even though many people disagreed with it, because there was a laying out of the issues, and to the credit of the Council, many of you put in your individual personal communications.

I'd like to see more of that, and that's why I'm inviting you in the summer to give us a little of your time and write your perspective. Just pick one of those questions or better questions that you can phrase than I have phrased here and say something about it. Is it an ethical issue? No, it isn't. Is that a fair question? No, that's stupid. Say it. But please don't say it that way. I haven't answered your question, Carl, but that's my commentary on it.

Gil?

PROF. MEILAENDER: As you know, my general comment from the start has been one of some skepticism about this topic. I've described it as a black hole, and if you get into it, you never get out. And I think that — I'm still not persuaded that that may not be the case.

But if we're thinking about how to proceed and you want these ethical questions emphasized, then it seems to me that the Council as Council needs to do something more. The notion that we can — I mean, what we have in the draft here is — I think there's useful information there.

CHAIRMAN PELLEGRINO: That's the background. Useful background?

PROF. MEILAENDER: Yes. And I think particularly — what's particularly useful about it is that it makes clear that there's not, in fact, one problem. There are multiple problems and, indeed, to solve one may be to exacerbate another. And, I mean, I think that's a very useful thing to see.

But if then one says there are ethical questions that arise out of this, why don't each of you write something about it. In the first place, many of us will not have time. Some of us write that sort of thing more than others do. I'm just not sure that's helpful.

I think it's helpful — it's been useful in some of our previous reports when there have been personal statements appended, but those are personal statements commenting on or even occasionally spinning what the Council report itself has had to say. And so it seems to me that we as a body ought to try to say something about a few of these questions.

I mean, you know, the question about whether there's really a duty to — obviously there can't be a duty to make people healthy, but there might be a duty to provide medical care or something like that and that relates to the issue of personal responsibility for health care.

It just seems to me that it would work — if we're going to proceed — and my previous reservations are still sort of in force, but if we're going to proceed, then I think we as a Council would need to try to produce something to which then different people could react more briefly or off of which they could play and so forth.

I have real doubts about whether it's going to work simply to provide the kind of prolegomena information that we've got here and then to say, okay, go ahead and write about whatever you want. So that would be my reaction to the plan as you've sketched it out right now.

CHAIRMAN PELLEGRINO: Well, I very much agree with it, Gil. I think it's — said in another way, I think — correct me if I'm wrong — what I was saying, namely that we ought to look at those questions and lay some of them out. I wasn't suggesting that we would abandon what we're doing in getting something ready for you for September, but rather that we would be enormously helped if those of you who have thoughts, just as you have, would send us that material and we'd try to incorporate it, as we've done in other reports. Generally we put them out to you, you've made responses to us, and we've tried to incorporate them — not all of them.

So I have nothing but appreciation for the way you've suggested it. And I know you and I have talked about it, that you have a bit of a skepticism, which I think is justified. That's why I said they are questions, rather than apodictic statements at the moment.

I have Ben Carson next and then Floyd Bloom and Rebecca.

DR. CARSON: This is a Council on bioethics, and the “bio” part means life. The ethics part means right and wrong. And all the other things that we talk about — stem cells, cloning, organ donation — you know, you could go right down the list. What does it all point to? It points to life. It points to providing quality of life. It points to providing longevity.

And ultimately the most important thing that a person has is their life. And a subset of that is their health. So the issue of whether we should be talking about it or not seems kind of silly to me. I mean, obviously, it's the most important thing. It's the pinnacle in terms of who we are as a society — the most important thing we have.

Now, having said that, many of the issues that you raised obviously need to be discussed. The issue of personal responsibility, I, as a physician, find that to be almost an irrelevant topic, and I'll tell you why. There are very few physicians or health care providers who are going to walk away from somebody who's in need because they were irresponsible.

You can talk about it. You can say, "Yeah, well, they didn't do this, they didn't that, so they" — but nobody is going to walk away from them. And we just need to factor that into any kinds of recommendations or thoughts that are made.

I had a patient yesterday, and there were some insurance issues. They were from out of state and the administrators and the people were saying, "Well, you know, I'm sorry, but the surgery is going to have to be canceled unless you can come up with a certain amount of money."

And so the mother was going to go and draw out money from the child's educational fund in order to pay for the operation. The father had died the year previously. They were by no means wealthy people. And when I heard about that, you know, I just said, "Absolutely not. Tell that mother to put that money back. If I have to do the operation for free, I will."

But that's the way most physicians think, quite frankly. And therefore that's why I say it's an irrelevant issue and we have to come up with mechanisms that take into account the fact that we are a compassionate society.

It's one of the things that insurance companies have capitalized upon. They recognize that physicians are a soft touch. They realize that they're not going to deny people care regardless of what the situation is.

So I think it's incumbent upon lots of different organizations and bodies to also find a way to protect the health care providers. They need to be protected, because they're not going to protect themselves. And if they don't protect themselves, eventually the whole system begins to crumble.

If we develop the same kinds of systems that many of the other nations have developed, we will reap the same kinds of rewards or problems that they have gotten. We have the best health care in the world, and yet we rank number 37. We have some of the worst situations in the world. The question is how do we get rid of the bad while maintaining the good.

CHAIRMAN PELLEGRINO: Thank you very much, Ben. I have Floyd Bloom, and then I have Rebecca Dresser, and I have Gil Meilaender. Bill, would you care to comment?

DR. HURLBUT: I'll wait.

DR. BLOOM: My comment is not should we take this issue up, but what we say about it and do we have the time to make an effective statement early enough in the terms of the next congress and president. And if our budget and our meeting cycle is such that we can't really do a bang-up job, I'd rather not take it up.

But my own tendency is that we should take it up and we should accelerate our schedule of participation in a way that we get our inputs to the writers and express the ethical concerns that you raise.

In my own mind I have difficulty separating the economic, social, and political aspects of what I see to be the problem. And I can't thank you enough for illuminating the ethical issues of the questions that lead me to the economic, social, and political issues. But what are we going to say, and is it enough just to confront the complexity.

I'm torn between the advice given to me as a medical student, which is — a medical student's tendency is when faced with a crisis to do something right away. And the resident who knows says, "Don't do something. Stand there and think about it."

And we've been thinking about this problem, as you say, for 100 years, and we haven't come up with an effective solution. So if we take it up — and I'm certainly in favor of taking it up — but I want us to be able to provide a product that would have some contribution to an ultimate downstream effective achievement of the goals as you enunciated them.

And so if we do it, I think we need to commit ourselves to participating much more effectively. You treat us very leisurely at this meeting. We have long lunch breaks and we have a long time between meetings, but I think this is potentially the most important thing we will take up. And therefore I would rather see us meet more often this year to get something out before the next president takes office.

CHAIRMAN PELLEGRINO: Thank you very much, Floyd. I think that is a very helpful comment and continuing along the way we hoped to go. In other words, we want to hear what you're saying. We'll get something back. And I couldn't agree more that the greatest damage we could do to any such inquiry would be to do it in a sloppy way or to do it from the point of view a polemical approach, or to do it from the point of view of self-righteousness.

Next I have Rebecca Dresser.

PROF. DRESSER: I think that what you've done so far in the staff's paper is very useful groundwork. The part 3 is the beginning of getting into the ethics. I think we could do two things. I think one we can do for sure. The other I'm not sure we can do, but maybe.

One thing is just to point out to interested people, some of whom are from the ethics community, the policy community, but some who are just people who want to understand more about this very serious problem — is the ethical questions and concepts that bear on this problem. And you've done that to some extent.

It seems to me after this meeting we're going to have some more speakers, some of whom will talk about a right to health care, one of whom will talk about having a religious basis to providing people in our community with health care, and perhaps trying to draw from us more about these are the ethical concepts and the ethical questions drawing from us. There could be a next step. So this part is more analysis — here's why this is relevant ethically and here is what is relevant ethically.

Then the second step would be and here's where we should go with it. And I can't say whether we can do that yet. I would want to see more about what is there in the first step. In terms of possible considerations to add that aren't in here yet — at least directly — there is this issue of is there a tradeoff that we have to make between innovation and equity, so that in order to have more equity, do we have to devote more resources to providing more people with adequate care and perhaps losing some in the innovation part.

I'm not sure whether that tradeoff is something that would have to occur, but it seems to me we need to talk about that and this whole issue of priorities and biomedical research, what kinds of research should have the highest priority, are there changes or revisions that need to be made there.

I have a recollection that Floyd, when you were president of AAAS made a really good speech on that — at least a speech I liked a lot about that. So that would be, I think, something to add.

Another is how the current system affects the quality of care even of well-off people. So this is mentioned a little bit about how it's so difficult to get an appointment right away. Another illustration is that even if you're well-off, on the weekends you're not well-off. So you have to go to the emergency room. And I just have heard so many stories about fifteen hours in the emergency room. Even — I never had it as a cancer patient, but other people I know with cancer who have spent that time.

And so it seems to me important to point out — I mean, one question is do we who are well-off — should we give so that others can have more benefit, which I think we should, but another is to point out how even we who are well-off are harmed by this situation.

And then a third point or concept to add is the effect that the current system is having on the morale of physicians and how fewer and fewer people are going into primary care because that seems to be the most difficult area of practice in our system.

And one ethical goal, it seems to me, should be to try to have a health care system where the physician/patient relationship, while not totally wonderful all the time, should be something that for both parties is sort of affirming and keeps the nature of it is — as sort of the beneficent basis that we always have though about medicine being. So that seems to me an important component to mention.

CHAIRMAN PELLEGRINO: Thank you very, very much, Rebecca. Next I have Gilbert Meilaender.

PROF. MEILAENDER: I don't know exactly what you envision the staff providing before September, but I hope we'll think about not ethics in a narrow sense, but in a sort of broader sense and some assumptions that work, because what you do with various kinds of ethical principles depends on a whole range of background beliefs that you carry along with you.

And this thought was triggered by what Ben said before, that the most important thing is life, which I think is clearly wrong, and I don't think Ben believes that for a moment himself, in fact. And at the very least there are some other goods we need think about — your freedom, your virtue, your honor, your attachments. None of these is more important than life?

Well, I think they may be on any number of occasions. So we need to — I mean, a fundamental question is exactly how important a good is life or health. And there are just assumptions at work in these discussions often about that that need examination.

So, you know, if we're going to press an ethical conversation, I think we need to get to those background beliefs somehow. We're not likely to agree entirely about them. They may be hard to really unpack in some ways, but I think if you don't do it, you're just spinning your wheels.

CHAIRMAN PELLEGRINO: I agree with you, Gil, and I also agree with Ben.

PROF. MEILAENDER: It's not possible to agree with both of us.

DR. CARSON: I just want to say that none of things that Gil mentioned are important if you're not alive.

PROF. MEILAENDER: And many of them are things that you're willing to die for.

CHAIRMAN PELLEGRINO: And what I would add to this is that laying out this difference, I would say, and defining what the implications might be in direction A or direction B is the kind of thing I'm thinking of.

Now, I guess I have a solid faith that if you lay them out, the right one will come up on this list. That's the one I think. I'm being facetious here now. I'm being facetious. I think laying them out is very, very important and there are important people on both sides of this issue.

DR. ROWLEY: Well, I just want to make a response to Gil, again saying that if the focus is going to be medical care and health, then some of the issues of honor, et cetera, are not directly involved. They certainly can be indirectly. But we have a different focus, I think, here in an ill child or a sick patient who can't afford adequate medical care in a society that is overall as rich as ours strikes at least some of us as being an immoral situation.

PROF. MEILAENDER: I understand that, of course, but a society that believes that nothing is more important than life will take a certain approach to health care, and it may be precisely that belief at work that has caused some of our problems, in fact.

CHAIRMAN PELLEGRINO: That empowers me to make just a little intercession. I think on this issue one of the things we would want to do, I would think, looking at the ethical issues is understand that there is some deeper metaphysical presupposition, pre-logical, if you will, in the reasoning which calls for a very different decision on what's ethically right or wrong.

But when I say it's an ethical question, I'm really asking for a definition of what the question is from an ethical perspective — that is, a formal, systematic, critical examination of rightness or wrongness of this particular act so that it would not resolve all the questions you've all raised, which are very practical questions, but at least provide public consciousness that it isn't all economics, politics, cost, value, et cetera. That's a major aim of my own.

I now find myself a participant in the discussion, and so I'll try not to abuse my chairmanship. Peter?

PROF. LAWLER: I'm somewhat in sympathy with Gil that the — to me, the ethical issues aren't so obvious, partly because although Janet is right, if you focus on health care, then health care becomes the most important thing. If you focus on life, life becomes the most important thing.

But since we're giving advice to the American government, the American government can't focus on health care in isolation or life in isolation. So let's even say our job is — we have the ethical principle, the best possible health care for everyone. But then Rebecca said if we want to have an affirming patient/doctor relationship, well, that takes time. That's inefficient and that might produce inefficient health care from a purely engineering point of view.

And let's say we need to bring the Bible in as one of our readings, that our government should be based on an Old Testament covenant, and I like the Old Testament, one of the top two testaments and all that. But still all kinds of questions are vague. The Old Testament and the other testament even more so, are all about charity and so may be about the preferential option to the poor and helping the poor out and love. But because the testaments tend to be relatively indifferent to life as the most important thing, especially the newer one, then you end up having an indifference to the development of medical technology that allows us to make people live a very long time.

So the same people who are being charitable all day long, like the Apostles, aren't doing a lot of actual life-saving in a medical sense. So if we're guided by the Bible, there would be a lot of more charity, a lot more concern for the whole human being who is afflicted in so many different ways.

But if we were guided simply by the Bible we might put somewhat less emphasis on the unlimited development of medical technology and all these crises, like the crisis in the shortage of kidneys and so forth.

So if you think about it, I'm all for the Bible, but the Bible — the guidance the Bible gives us is sort of ambiguous because it's not about life at all costs, actually.

CHAIRMAN PELLEGRINO: Thank you. Paul?

DR. MCHUGH: Well, I'm finding this conversation very helpful, and the ideas that we're trying to make clear to each other what is out there and what we are aiming at. Let me back up a little to tell you why I am still confused about the issues in front of us.

I'll put it to you this way that there are aspects of this issue in which we're using the word health care and we really mean illness treatment. Okay? That is, health care is so broad and health is such a universal thing I don't know where the limits might be in working that way.

And, in fact, at my institution I belong to two elements, one across the street from the other — the Public Health School and the medical school.

In the Public Health School, we're interested in working with populations and managing and helping populations. In the medical school we're interested in treating individuals who have a particular illness. Okay? And I wear hats on both sides, and occasionally I get confused about it, but I understand what I'm doing, especially with the government when I'm across the street in the Public Health school.

In public health I believe that we're trying to protect, as well as treat a population. So we work on things like the water system of the city. We work on the issues of immunization. And then we work on certain populations that we believe have illnesses that render them helpless and in need of care, particularly, of course, that includes the mentally ill.

And then when I look at, okay, well, how well has the government done and picked up on the issues of the mentally ill. We have a very checkered record. We began in the 19th century totally committed with such wonderful people as Dorothea Dix who probably did the first social science piece of work in our history, American history, demonstrating that the mentally ill, vulnerable and violent, were all in jails and in other shelters and not getting the care they needed.

And we as a country moved forward and said, "We're going to take care of them." We got overcrowded. In the 1960's we had what I call an unholy alliance between the conservatives who wanted to save money in the mental hospitals and everybody else was worried that maybe the freedom of those poor people were being afflicted, and so we turned them all loose into the streets.

And what did they do, they went into the back alleys and they suffered terribly. And, of course, as well they caused terrible trouble. The Virgina Tech episode was due to the fact that we couldn't figure out as a government what to do with a seriously mentally ill person who was quite dangerous and everybody knew he was dangerous.

So on the other side of the street, there's no question that I'm working with individuals, and just as Ben says, we're not going to turn anybody away who's sick. So whatever kinds of policies that we're going to do and talk about as an ethical group, I would like us to be able to say, perhaps, that we're relating ourselves particularly to illnesses, from the illnesses that the people everybody could agree are helpless and hopeless in their care and needs to have an agency of government and perhaps other eleemosynary groups to help them and care for them down to illnesses in which in we'll expect not only can there be help for the poor, but also for the less poor, that they will collaborate with the services to maintain the hospitals, to maintain the services and the equipment that Ben needs to do his wonderful, wonderful surgery.

I would feel better about the ethical postures that we were taking if we were talking less about health care and more about illness care and defining which illnesses we mean when we call for the resources of the government and the resources of families to provide them.

CHAIRMAN PELLEGRINO: Thank you very much, Paul. I think you might recall that in my quick going over I said one of the questions was to distinguish medical care and health care. One is a rescue.

DR. MCHUGH: I do remember that. I just wanted to speak to my condition.

CHAIRMAN PELLEGRINO: Oh, you just wanted to elaborate, and you did very well, but I just wanted to know, I do agree with that separation. And the point I was leading up to, however, though, is many ethical issues are conflicts of obligations. We may start from believing that we have obligations to both, but when conflicts of obligations occur, we need some priority principle that will enable us to choose in which direction to go. And so, again, I think that's a formal part of an ethical analysis that I would see very, very appropriate, as you pointed out.

Carl and then Ben.

DR. SCHNEIDER: It strikes me as possible that the conversation illustrates the black hole. And one way that might make it possible to stay away from the gravitational force or whatever it is of the black hole would be to ask where we are in the United States today and what the public issue is.

And the public issue, I think, is the question of the great difficulty that a large number of people have in getting basic medical care. That's the question that we've been working on and arguing about for 100 years.

And as I recall, Harry Truman tried it the year that I was born many decades ago, and I think the more that we try to fully elaborate all of the principles that might be involved in thinking about restructuring health care, the more hopeless and black hole-ish things get.

It strikes me as possible that one might say whatever else you do, there is an urgent need to deal with the particular problem of people who simply can't afford even quite basic health care or are given it in such a difficult way that effectively they can't afford it.

It strikes me as possible there might be some even consensus on the social, moral, ethical duty to provide that kind of care. The reality then is that what's going to happen is that the question will be decided by another one of these huge political conflicts in which people with all kinds of beliefs and interests are going to negotiate.

And at that point everybody is going to have to give up valuable things, and I think it stops being possible to say this is really the morally preferable way and the real issue becomes not what would the optimum moral way be, but is there any way that we can convince people that the ethical duty to provide this kind of care is so urgent that you ought to be willing to compromise to find something.

CHAIRMAN PELLEGRINO: That states the issues very, very well and very clearly. You ask the question, you have a moral obligation, now we get to the practical question, how best to bring it about and what are the limitations and what are the problems.

DR. SCHNEIDER: Those are the questions I would avoid. It's just stating a single important principle.

CHAIRMAN PELLEGRINO: Ben.

DR. CARSON: I want to clarify what I was talking about and the basis of it. When I first came to Johns Hopkins decades ago, I was very impressed by some of the types of patients that I saw there — the crown prince of this country and the CEO of this company and the president of this organization, people of enormous accomplishment, people who had written volumes on great intellectual subjects, dying of glioblastomas.

And every single one of them would gladly have given every title and every dollar for a clean bill of health. That's what I'm talking about when I'm talking about, you know, what really becomes important at certain points in time.

And a lot of the things that we talk about are aimed at giving people a clean bill of health or helping them to maintain a clean bill of health, and, therefore, if you can talk about the things that are aimed at a goal, then why not talk about the goal itself.

And how can we provide good health care for everybody, I think is, in fact, a significant moral and ethical issue. We spend more per capita for health care than any other nation in the world and yet we rank significantly down the list in health care. It means that there are some huge problems in the system.

Is it our job to address those and to fix them? No. But I think we could provide some service by pointing out some of the things that are preventing us from being able to reach at least the level of many other industrialized nations in terms of health care distribution when we pay so much more than they do in order to achieve it.

CHAIRMAN PELLEGRINO: Thank you very much, Ben. Right on the point. Anyone else, or have we exhausted the question? Thank you. Peter.

PROF. LAWLER: Dan and Carl sum up the remarks. They didn't get way metaphysical on us. They just took as a given in the spirit of geometry that every American should have access to basic health care, not even exactly as a universal and deep right, but we're spending all this money, we have all this technology, and we should be able to do this. And at that level there is in the country a broad consensus. Both presidential candidates are in favor of doing that. Their plans aren't as different as it first seems and so forth.

And so Carl's criticism amounts to a lack of intensity, that we don't regard this as important enough to just sit down, compromise, try to do as Ben says, to get this done while keeping what is good about our present system. So we need to sit down and get this thing done while preserving as much as we can that is good about our present system.

So there is a consensus in the country, I think, in the need to do it. The country has not gotten together and put down a metaphysical foundation. As a philosopher I hate says, [there is a] kind of “overlapping consensus,” and while this is a good thing to do, and I don't think anyone in this room or any room in Chicago would deny that in some sense we need to get this done.

And the fact that we don't get this done is about — because our present system is a monstrous series of accidents based upon things that are no longer relevant, like employer-based health care and so forth — employer-based insurance and so forth.

So if there's a crisis, it would not be a crisis in metaphysics. It wouldn't be a crisis in resources. It would almost be a crisis in intensity. We don't regard this as urgent enough to get it done fast.

CHAIRMAN PELLEGRINO: Bill, I think I saw an expression that suggested you wanted to speak.

PROF. MEILAENDER: Well, I just don't believe that, Peter. We have all sorts of smart people who themselves, at least, certainly think it's extremely important, thinking about it and working on it, and unable to agree about how to accomplish it. So it just seems to me that, prima facie, it's a little more complicated than that.

PROF. LAWLER: I think there is a rough agreement on the goal, but there is considerable disagreement on need. And one reason there's a disagreement on need is the fact that we don't have facts straight.

PROF. MEILAENDER: There are many goals. And we regard them all as important and what we haven't got the foggiest idea is how to go about trying to achieve them simultaneously.

PROF. LAWLER: But there is an agreement that we shouldn't have a large number of people who are uninsured or incapable of getting insurance and we need to move away from that in some sense. There is massive disagreement on how to do that and what method is — most of these things are prudential matters, actually: How will we achieve this in the best possible way? But if you look at the program of McCain and the program of Obama, the goal is not so different. How to achieve the goal is somewhat different.

PROF. MEILAENDER: But we could achieve that goal overnight if we didn't give any high-tech treatment to people over 70. And there are all sorts of things you could do if you really wanted to accomplish it.

PROF. LAWLER: Yeah, but that's not the goal I'm really talking about. Actually the goal I'm talking about is having everyone have access to insurance, either — and the method most likely [to achieve that] is to … detach insurance from employment, have people buy it who can afford it and have subsidies — tax breaks and subsidies for people who can't afford it.

DR. SCHNEIDER: The political reality of these debates has been that you have groups with interests that have been very insistent on prevailing. Organized medicine has had an extraordinarily powerful effect. Insurance companies have been effective. And people can be convinced — ordinary citizens can be convinced that their interests are very directly at stake.

And so I think Peter is right. The problem is we're asking people to give up things that they want to have and to compromise their own direct personal and economic interests. And we have a system which makes it possible for lots of groups to veto change, certainly in combination. And so I think the intensity of the moral duty is a point worth establishing.

CHAIRMAN PELLEGRINO: I think all of these practical difficulties you're laying out are without doubt part of the discussion. But I suppose whatever comes out of an attempt to describe the ethical issues, if one can raise them in a non-offensive but appealing manner, one really hopes — and I know you practical minded people around the table are going to say the chairman's idiocy is now reconfirmed — but I do think that a well presented moral position does move people.

Now, I'm not a preacher, and I don't have the powers necessary, but I do think and have more faith, I guess, in the American public's capacity to grasp what it means to do some of the things we're doing and go to one of the questions I raised, what it reflects on the kind of nation we are in the way we treat the under-served, those on the margins of society, the very young, the very poor, the very ill. We're not doing a good job of that.

PROF. MEILAENDER: Well, just one more word on behalf of the metaphysics of this. All these people who we're asking to ratchet up their intensity about this problem and understand that we must all give up some things in order to achieve this agreed-upon goal are people who we also seem to think are committed to the principle that they want to live as well as they can for as long as they can. And as long as that fundamental good is at work in the background, you're going to have a very hard goal of persuading us to make these sacrifices when push comes to shove.

CHAIRMAN PELLEGRINO: I think that's a reality, Gil. There's no doubt about it. And I just would like to see a balanced point of view on the other side of it.

PROF. LAWLER: I actually don't completely agree with that in a sense. It is a question whether our country from a political point of view can deviate from the principle that people can live as long as they can and that public policy that actually supports that demand. I would be in favor of a public policy that does limit talk about rights. Rights reside with the individual.

DR. SCHNEIDER: Could I just raise one question that might be —

CHAIRMAN PELLEGRINO: You may.

DR. SCHNEIDER: If the staff has a relatively available way of answering it. How many other countries have managed to reach some accommodation of this problem? How did they do that? How central was metaphysical reasoning in their doing so?

CHAIRMAN PELLEGRINO: There's a question I think the sociologists could answer and the historians better than I could, but I think that an approach to this in a pluralistic society, in a democracy, will mean agreement upon what is an action that we all accept without necessarily sharing the same metaphysical theological foundations.

And the one example that I use about that is the U.N. agreement on the dignity of the human person, the equality of the dignity of every human person, which was based, as you know, on a response to the horrific experience of the holocaust and associated activities. They came together, 30, 40 nations, and signed it.

I think I've mentioned to you that I've been on the International Bioethical Committee of UNESCO where we issued a declaration which again said the first principle of bioethics was the dignity of the human person, which had to be protected, even in the light of human experimentation, et cetera, et cetera, et cetera. I assure you, having been there, the metaphysical din was a very, very highly impressive one. But nonetheless, they agreed on the principle.

I think in this nation we could. Now, I don't know how many of those there would be, how many it would be possible to do, but unless we give the definition, we can't begin to say how about this. And I'd like to quote — and I did in my paper in the Dignity volume — John Keats, who says that you have to feel these things on your pulses.

The poets are the antennae of the race, in my opinion, and I think Keats caught the notion that an axiom wasn't an axiom until you really felt it on your pulses. And I think maybe the reason Ben and I and doctors take the position we see it in the city of Washington. I've lived there 35 years — a neglected population of people who are not — we're not talking about advancement of their health to the state of enhancement. We're talking about daily needs that are unmet and can't be met because they can't pay for it, can't have access to a doctor. What does that mean to the American people about the kind of people we are? That's the question I'm asking.

DR. MCHUGH: I just want to come back in for the defense of the aged. I've been doing this for a long time on this Council, especially whenever we have Daniel Callahan come back and tell us and remind us of how should be watching it.

Medicare was put into place primarily because we began to realize that the people that were the most likely to suffer from neglect and from not having the support that they needed were the elderly. And I'm not here to speak for a system that would begin its rationing by cutting out people my age and older, for one thing.

But then, again, it brings me back to what I was saying before. This is the problem with talking about what amounts to a public health system. As soon as you start thinking in terms of public health, you begin to talk about the issues of rationing. I'm interested in treating illness and the illnesses that are expressed by individuals. I would like to cure them.

I would like to see both the government monies and the family monies distributed appropriately in relationship to illnesses and the experiment from Medicare on that would speak to the particularly vulnerable and might ultimately speak to certain kinds of illnesses that are emergency illnesses and for which families could be totally bankrupt if they weren't supported for them — those could be quite differently related to in a health system — a so-called health or an illness system versus something like the common cold.

And this is where I get exorcised, because the elderly, who I take care of a lot of and belong to, are quickly pushed out once you begin to think such things as, "Now we're spending 90 percent of our health care on people who are over 70" and all of this. I think it's rubbish.

CHAIRMAN PELLEGRINO: You're raising the question of how do we approach those questions, and we need to have some guidelines. And that's what we've been talking about.

DR. MCHUGH: But notice that the reason I'm concerned and making this point about whatever system we have working, as it becomes less and less illness related and more and more public health related, then certain kinds of ideas come up as to how we should practice it. But you and me and Ben and others have to look at the individual right in the eye or across the bed and we have to tell them that we're going to do everything we can to help them because we do not doubt their worthiness for our effort.

CHAIRMAN PELLEGRINO: And the moral responsibility has some relationship to the proximity of the person suffering to the person able to satisfy that. And whenever people talk to me about saving money on this patient so that someone else can, that I haven't seen who is a probable patient, I, as a clinician, have to say I'm sorry, the one presenting is the one I have an obligation to at the moment.

Well, we have had another — leaving my contribution out, but a very, very splendid discussion and it will be reflected back into what we try to do with the staff during the summer, and you will see parts of this or perhaps something that's orderly and able to be looked at in the fall. And thank you very much. It's time to lunch. We reassemble at 2:00.

CHAIRMAN PELLEGRINO: Thank you again to the Council members for appearing on time. It affords our speakers your maximum attention, at least temporally. This afternoon we're going to look at the ethical questions from the point of view of people who are involved in designing and propagating and thinking about various programs to which we referred. As you know, we've had a number of presentations of a variety of proposals over the years.

We're going to proceed as follows: We'll ask our three speakers to make their presentations, then give you an opportunity to raise questions with them, then a break, and after the break we'll return and they will direct themselves to what they take to be the moral issues and the way they see it with reference to the kinds of programs and the broader issues in the healthcare and medical care question and problem.

So we're going to start first with Steffie Woolhandler from Harvard Medical School, who will talk about a single-payer system. That will be the general direction of that first presentation. Dr. Woolhandler.

DR. WOOLHANDLER: Well, thanks for having me. I'm not a medical ethicist. I'm a primary care doctor, and the way I think about health policy in this context is in terms of the issue of placebos. That is, for us as doctors it's unethical to prescribe a placebo when there's an effective therapy.

And I'm going to argue today that many of the current proposals are, in fact, placebo reforms and that they're unethical to endorse because, actually, effective reform exists.

The problem: We've got 47,000,000 uninsured Americans generating about 18,000 excess deaths among adults each year. So that's a problem. As we sit here over the next two days, 100 people will die in the United States for lack of health insurance. That's the core ethical problem we're trying to face here.

But there's also the issue about Americans being impoverished by paying for illness. That is, they do get the care, but they're impoverished. And this is actually a Mike Luckovich cartoon -- he's a Pulitzer Prize-winning cartoonist -- that came out when we published a paper showing that about half of US bankruptcies are due at least in part to medical illnesses or medical bills. And this poor woman is saying, "Curses! My plot to get sick and go deeply into debt to avoid paying off my credit cards has been foiled."

Now, it turns out that medical bankruptcy is, as I said, half of all personal bankruptcies. Millions of people each year are affected by medical bankruptcy, but 76 percent of people who were in medical bankruptcy in our study had health insurance at the onset of the illness that bankrupted them.

So insured people have an issue, too, if they have a prolonged, serious illness. They can't work. They have lots of co-payments, lots of deductibles. They can end up in bankruptcy, as well.

This is because families simply don't have assets to pay deductibles. This is extremely important as we hear about so-called consumer-directed high-deductible plans, which are a very prominent piece of many of the new policy proposals, including those of John McCain, including that of the new Massachusetts law, high-deductible plans; President Bush, high-deductible plans, $5,000 deductible, typically.

But 40 percent of the US population does not have total financial assets of $5,000. Total financial assets, less than $5,000, so that families simply can't pay the deductibles. They end up not getting care or getting the care and going into bankruptcy.

In addition, we know that from the Rand health insurance experiment that co-payments reduce both useful care and useless care, and that's why our organization advocates a national health program with no co-payments, no deductibles and opposes high-deductible plans, consumer-directed healthcare, cost-sharing, all the different names that are used for these underinsurance, this inadequate insurance that is increasingly put forward as a new policy placebo.

We've also spoken a lot within our organization of tremendous bureaucratization in healthcare. It's a growth of physicians in yellow on the bottom, growth of administrators in the top in blue, and that is not a mistake on the y axis. It is 2,500 percent growth in health administrators.

Of course, the administrators are very involved in managed care, and, again, managed care is a very prominent part of many of the proposals for privatization of Medicare, for instance, HMOs. Despite the fact that we know from the Rand health insurance experiment that among people with even mild chronic illnesses three to five years of HMO care leads to an elevated risk of dying due primarily to an elevated diastolic blood pressure.

So we do know, and we knew before we started down the road to HMOs, based on randomized control trial, that people with chronic illnesses do poorly in the HMO setting.

We also know that the investor-owned HMOs provide consistently lower quality care than their nonprofit counterparts. This is some data we published in the JAMA showing that on every one of the 14 HEDIS measures then available, the investor-owned HMOs had lower quality than their nonprofit counterparts.

I think this is due, at least in part, to the very high overhead in the for-profit HMOs. I've sort of listed the market leaders here. Twenty-three, 21, 20 percent overhead. What that means is that for every dollar that is paid in as premium, either by the individual or in the case of Medicare by Medicare -- every dollar that's paid in, only about 77 cents actually comes out to pay a nurse, a doctor, a drug company.

Twenty-three cents stays right there with Aetna to pay for their overhead and profit. So a very simple-minded view of why HMO care does cause problems in terms of care of the chronically ill is that too much of the money is diverted away from care and toward overhead and profit, including the CEO pay and stockholdings, 2005, most recent date I could fine.

And I just love to pick on Jack Rowe, number three. He's a former colleague of mine at Harvard. He worked for Aetna for just under five years and earned about half a billion dollars. And to give you some sense of how much that is, Jack was earning $220,000. That is $220,000 per day for every day he worked at Aetna, including weekends and holidays. So that's money that's diverted away from patient care toward his exorbitant salary, also overhead and profit.

Now, let's talk economics. I actually have an economics degree, and when my friends want to tease me they make this nasty joke that an economist is someone who didn't have the personality to become an accountant. But, of course, you have to understand economics to understand what's really possible and what's not.

And the US is already spending -- these are figures from a couple of years ago -- by far the most of any nation on earth on healthcare. The US is on the bottom. On the top I've listed total health expenditures in other developed nations. For the US at the bottom I've listed total per capita health expenditures divided into the publicly funded and the privately funded share.

And in publicly funded I've included not just Medicare, Medicaid, VA, but also the benefit cost of public employees like schoolteachers and FBI agents, also, so-called tax subsidy to private health insurance. And when defined in that way, I want you to just look and see where that yellow bar ends. Look where the yellow bar ends.

That is, we are already through our taxes paying the full price of national health insurance in this country, and then we take an additional $2,500 out of our pockets and pay privately, and we still have the circumstance of 47,000,000 uninsured people, millions more forced into medical bankruptcy.

Now, what do we get for the extra money? And in this set of slides I've got the US in yellow, the other countries in green. What do we get? We do not get longer life expectancy compared to other nations. We do not get lower infant mortality than other nations. In fact, our infant mortality is twice that of the world leaders.

We don't get more days in the hospital. We send patients out of the hospital quicker and sicker. We don't even get more innovation, more science. And I know one of the speakers brought that up earlier.

When you look at medical journal articles on a per-capita basis (and you get the same results if you look at total scientific output on a per-capita basis_, the United States is not a world leader. So our extra spending is not generating more in the way of science when we look at it on a per-capita basis. That is a myth.

Even for certain high-technology treatments such as bone-marrow transplants, the United States is just in the middle of the pack. Where we do lead the world is in our insurance overhead and our administrative costs. And this is expressed on a per-capita basis for every man, woman, and child in the United States.

We lead the world in insurance overhead. We lead the world in difficulties getting care. This is people are asked, percent, finding it extremely, very, or somewhat difficult to get needed care. We lead the world. This is just the English-speaking world.

Now, what is single-payer national health insurance? And, of course, many people were kind of surprised when they heard that a large group of physicians, our group, Physicians for a National Health Program, could recruit about 15,000 physician members to advocate for an increased government role in healthcare.

I mean, people were shocked that 15,000 physicians would do that. And the editor of the Berkshire Eagle made this joke: "Physicians for a National Health Program. That's sort of like furriers for animal rights."

But we do find an increasing number of physicians willing to join our group and join with us in really advocating for single-payer national health insurance. It's not because the physicians will be better off, though we don't think we'll be worse off either. That's not what it's about. It's because we find increasingly we just can't take care of our patients.

But in Canada they have a program that's got -- and this is from the Canada Health Act -- universal coverage that does not impede either directly or indirectly, whether by charges or otherwise reasonable access. And historically that's meant if it's covered, it's free, no co-pays, no deductibles. The last year, too, that's changed, but historically everything that's covered is free.

Portability from province to province -- if you're from Ottawa, you get stuck in Victoria, you're covered. In fact, if you get sick in Florida, you're covered, too, if you were just visiting Florida.

Coverage for all medically necessary services -- and, again, traditionally that's meant everything but cosmetic surgery and certain psychological services that are considered elective. And a publicly administered nonprofit program -- that's both for fairness and for efficiency, to gain the administrative efficiencies that allows you to take the money now wasted in administration and use that for care.

Cost outcomes -- prior to implementation of Canada 's national health program, the two cost curves in the countries were on top of each other, but there's been tremendous divergence over the decades since Canada started their national health program.

I do want to point out in the 1990s where the spending in Canada went down. There were very conservative governments in power in Canada. They opposed social spending, and they really suppressed the budgets of the national health insurance system. There was a lot of dissatisfaction. There were, indeed, waiting lists.

But in the 2000s, the budgets have been expanded again. More liberal governments have come into power, and those waiting lists have, in fact, evaporated. You don't need to trust me on that. You can go on the website of most of the Canadian provinces and they'll tell you on the website how long you'd have to wait if you signed up for a prostate surgery tomorrow. It turns out it'd be less than a week in the Canadian provinces last time I looked. I was doing a paper for a urology journal. I'm not planning prostate surgery.

Differences in health spending per capita, US versus Canada. If we take the entire difference as a giant pie it turns out nearly half of the spending differences between the two countries are due to differences in bureaucracy and administrative cost.

Now, I want to talk a little bit about some of these other placebo reforms because there's been a lot of talk about how successful we are in Massachusetts, and I do think, in fact, it is a placebo reform. I'm just going to talk briefly about the new coverage provisions.

For people less than 150 percent of poverty they expanded Medicaid but added some co-payments. That I like. I like covering everybody with Medicaid who's poor. Between 150 and 300 percent of poverty there were partial subsidies, but people still had to take some money out of their own pocket, and there were more in the way of co-payments.

Above 300 percent of poverty, it's buy your own. You're on your own. There's a mandate out there. You're on your own. You have to buy the coverage. Three hundred percent of poverty is $31,000 for a single person. Massachusetts is a very high-cost state. Believe me, at $31,000 a year you do not have a lot of cash left over to go out and buy a policy. In this case, the cheapest one available is about $400 a month, and you would get a $2,000 deductible with that.

Now, if you don't buy the policy you can be fined, and, you know, crime and punishments, violation of the child labor law -- it's a $50 fine. But being uninsured in Massachusetts, the law authorizes a fine up to about $2,000. So far they're talking about a $1,000 fine on the uninsured themselves who won't go out and buy this very expensive policy, which many can't afford.

Consequently, I went onto the Internet the night before last to tell you how many people have signed up, and among people less than 150 percent of poverty, the blue is who signed up. Things look pretty good. The free coverage -- there's very good uptake on that.

Do I need to tell you that virtually all of those people in that group were covered by Massachusetts free care pool, so they could get free care already. It wasn't insurance, but they could get free care at my hospital and many others in the state. But now they have an insurance card. Some are better; some are worse.

Among people 150 to 300 percent of poverty, only 22 percent have signed up for the insurance through the Connector. And among those over 300 percent of poverty, the ones who have to buy their own, the ones who are really subjected to the mandate, according to the Connector, only 7 percent have signed up for government-sponsored insurance.

Now, there's rumor out there that more of them have somehow signed up for employer-sponsored coverage. That is not verifiable at this time. It may be true. So it may be that of that 93 percent who still look like they're uninsured, 10, 20, even 30 percentage points of those may have signed up for private coverage. But no one is speculating that more than half of that group is now covered.

So that's how it works, and I would postulate that it's in fact an experiment with a Medicaid expansion. And if you take a Medicaid expansion, you pour a billion dollars extra into the state as Massachusetts did, yes, you can expand Medicaid. You can cover some people.

Is that sustainable in the long run? History would suggest that it's not. I want to tell you that this mandate model for reform is an old one. It's been around since Richard Nixon. The mandate model -- the government uses its coercive power to make people buy private health insurance. That's what a mandate model is. That's the definition of a mandate model.

Typically the mandate model would have expanded Medicaid-like programs as I've described, free for the poor, subsidies for low income, with or without buy-in for other people. It's accompanied by the mandate, either employer or an employer and an individual mandate, and they've always involved some managed care or care management. And as you know, Obama only has a mandate for employers and people's children.

Now, the problems with the mandate model: The first one is there's no cost control. There's no cost control. So over the long run, expanded coverage becomes unaffordable. The computers, care management, prevention may be great things. We have no evidence from anyone that you can control costs through computers. Mandate model adds administrative complexity and cost, retains the wasteful private insurers who keep breaking off that overhead so that the money is not there to care for patients.

They have impeccable political logic. You know, the employers like them sometimes. They like the one in Massachusetts. In any event, the insurance companies like them. The doctors like them. They may have political logic. They're economic nonsense. You can't just keep pouring money into the same system and get to universal healthcare in any affordable way.

And to just give you some historical evidence in this, the first enactment of a mandate model, which was still experimental at that point, was Governor Michael Dukakis on the eve of his presidential bid, universal healthcare based on a mandate model. He celebrated it. The New York Times celebrated it.

But if you look at what happened to the number of uninsured in the state as a percentage of the state's population, really no progress whatsoever, no sustained progress, other than, as you can see in the middle where we did a little Medicaid expansion, we got a couple of percentage points of progress, I think similar to what's going on now.

Oregon, 1992 -- they actually passed a full mandate model very similar to what we have now in Massachusetts. Again, the governor crowed about it. The Washington Post said it was going to work. You know, no effect on the number of uninsured. Washington state, a virtually identical model to what we have in Massachusetts now, a mandate model -- The New York Times again saying universal healthcare in Washington state. No net effect, because they were not affordable. Over the long run the legislature can pass this thing, but when they see the price tag, they pull back from the Medicaid expansions. They pull back from the mandates. They say, "We can't impose this on industry and individuals."

Minnesota in 1992-93, another state-based reform. Again, no effect on the number of uninsured. Maine, 2003, the so-called Dirigo plan, wasn't really a mandate, but it had one of these connector things, coordinator things to help people get care. Again, no effect on care.

Now, why do we see this over and over? I just want to say there's an 800-pound gorilla in the middle of this room that none of us are talking about, and that's the private health insurance industry. And that's why no one is proposing single-payer national health insurance.

Single-payer national health insurance has a track record in other countries of covering people, of improving health, of getting the job done. It has a track record of allowing patients and actually providers considerable clinical freedom. That's the track record.

And the reason all these other mandate things are on the table has got nothing to do with their effectiveness because we have no evidence they're effective. It's the power of the insurance industry.

I live in Cambridge. If you look over the Charles River, the two tallest buildings in Boston is the John Hancock tower on your left and the Prudential tower on your right. They tower above us. They tower above political debate. But we're an ethics group. I'm a medical group. You're an ethics group. It's our job to get the patients cared for and to really speak truth to power, and that's what we're talking about here.

Finally, I just want to mention that John McCain is not a proponent of mandates. I'm not sure he's a proponent of universal healthcare. It's been a little unclear. But he's basically talked about continuation of the Bush health agenda, including the accelerated privatization of Medicare. He'd like to accelerate that.

The skimpier consumer-directed insurance policies, which I don't think work -- and he has new tax credit proposals but has not put forward a plan about how to finance them, raising the question does he have any intention of ever financing them or ever enacting them. I don't know. But he has proposed tax credit proposals but has refused to say how he would ever pay for them.

Now, I'll just talk briefly about the public: What does the public want? Because, again, in ethics it's not just for us in this room to decide; it has to do with what the public expects.

And in the latest poll I could find on this, an ABC News poll/ USA Today /Kaiser survey, people were asked, "Would you prefer the current health insurance system or a universal coverage program like Medicare that is government-run and financed by taxpayers?"

It's a pretty fair description, only I want to say that a single payer is not exactly universal Medicare. It's universal Medicare without co-payments and deductibles. So for those of you who work in health finance, we have a term for people, dual eligibles, who get Medicare and Medicaid, who get Medicare coverage, only everything is free.

So single payer is kind of like Medicare for all or Medicare dual eligibility for all. All effective treatments are, in fact, free, as they are in much of northwestern Europe and Canada.

Well, it turns out even with this question, a clear majority of Americans endorse the idea of a tax-funded system. In fact, when people are asked, "Which do you think is more important, providing healthcare for all or holding down taxes," a majority of Americans feel that it's more important to get healthcare for all.

Again, a bit of a loaded question because other countries have single-payer systems that are, in fact, cheaper than what we have. You might have to raise taxes, but then you would lower people's out-of-pocket payments and the amount of money deducted from their income for their employee benefits.

Finally, we did survey a random sample of Massachusetts physicians. We got the random sample from the AMA master file to ask, "Which of the following three structures would offer the best healthcare to the greatest number of people for a fixed amount of money?"

And, again, asking doctors, "What do you recommend? Not necessarily what you support, but what do you recommend as best for your patients?" By more than two to one, single payer beat out all the other alternatives, existing fee-for-service or managed care systems.

I know I've gone very fast through these slides. I had an old mentor who used to tell me that you have to read every word on the slide, and I didn't do that for the group, but you can go to our website, Physicians for a National Health Program. I have made these slides available to all of you, or you're welcome to e-mail me through the Harvard Medical School website. My e-mail is up there, somewhat foolishly, I'm afraid. But it is up there, and you can reach me through that site.

Anyway, I think it's about time to stop. I didn't mind the lady in the back looking at her watch, but then she started to shake it. And I look forward to your questions later.

CHAIRMAN PELLEGRINO: Thank you very, very much. We'll move on to our second speaker, Dr. Len Nichols of the New America Foundation, who will talk about mixed government and market reform programs.

DR. NICHOLS: Well, thank you, Mr. Chairman. I must say Steffie is a hard act to follow. I've been accused of many things in my life but never of being a placebo before, so that's a whole new scientific dimension for me. I'll be sure and tell my brothers, who won't believe it.

What I want to talk about is what I would call the middle way, I would say the way that's actually feasible, and in my argumentation I will argue it's actually the best because it's sustainable over time.

It's probably worth saying just a word about New America because we're not exactly a household name. We are a 501(c )( 3) nonprofit, nonpartisan research institute and think tank in Washington, DC.

But we really were created because the people who started it about ten years ago figured out that Washington was so hopelessly polarized, we needed something to try to create space for a bipartisan conversation, because it turns out, certainly what I learned -- if you read my background you know I was part of the Clinton effort, and I'm not ashamed of that. We tried. I don't like every single word in the 1,500-page bill, but I'm not ashamed of having tried.

But the thing I took away from that experience is we're not going to do this as a nation unless we do it on a bipartisan basis. It cannot be a single-party margin. So I say my job is to create space for that bipartisan conversation.

Now, you know there are people in Washington who make a very fine living and have had long, distinguished careers who pretend to believe things that are not true. And there are people in Washington who have had long, distinguished careers and make a very fine living who demand things that cannot be.

On some level my job is to make them both mad every day but to keep them talking to each other because it is in talking to each other that we have a chance.

I want to say just a little bit about why I think we're having this conversation as a nation right now, what has driven it to the forefront. I'll lay out my vision of the elements of reform, a political pathway to get us there, and then after Jim does his talking we'll take a break. We'll talk about the moral justifications.

I think there are two big reasons and two smaller but growing reasons. The first one is premium as a fraction of income. You go back and look at the run-up to the '93, '94 era, that '92 campaign. Remember? It was the economy, stupid. That was about the recession that was very deep that actually probably is what cost Bush I the election.

And in that time period a lot of people were being restructured in the rust belt and white-collar people were losing their jobs. There was fear of affordability of healthcare because of a recession. You can actually track the monthly polling results in support of a Clinton plan. It went down as the economy recovered.

So fear of affordability then was driven by the recession. Once the recession went away, support for reform dissipated. Today, fear of affordability is driven by cost. A premium for a family used to cost 7 percent of median family income. Today it's 17.

And that's just another way of saying healthcare costs are growing so much faster than economy-wide productivity that it's becoming unaffordable for a larger and larger fraction of our population. Again, this is corroborated by a lot of the data Steffie just talked about.

The second big reason is international competition. You might remember there was life before NAFTA, and what used to be true is that American corporations could simply shift very high, fast-growing premium growth into prices. They can't do that anymore because of China and India and the competition from the Europeans.

And, similarly, they can't push it backward into wages quickly enough. They try, but they can't push it backward into wages quickly enough. So part of it is being borne by profit, and that's partly why those corporations are coming to Washington and grabbing politicians by the lapels and saying, "Quit this Kabuki dance. Solve this problem." And those business coalitions are really what's driving the conversation behind closed doors.

I won't go through the details. This just shows what American per hour cost in healthcare and manufacturing, $2.38 an hour here versus 96 cents for trade-weighted average partners, which is an albatross we bear.

Now, the third big reason is there's way more awareness of the linkages among the problems. I would say we know a lot more about the cost of spotty quality. We've had a lot of great research in the last 15 years, talking about medical errors and so forth.

And I think we know more about being uninsured. We did not have the Institute of Medicine reports that 18,000 Americans die, as Stephanie told us about. We did not know the economic cost of that lost productivity and that premature death and premature mortality was as high as it is, in fact, as high as it probably would cost to cover that. We didn't know that.

And then finally I would say the system stresses are appearing more unsustainable. I believe it was Professor Dresser who talked about waiting in an emergency room. I mean, fundamentally what's happening is our capacity is being strained, and that is becoming more and more noticeable to the middle class in lots of ways.

And, of course, the point that I should have on here but did not is it's a fundamental reason -- it's in your background paper that was prepared by your very able staff. The single biggest reason we have fiscal stress at the local, state, and federal levels is because of the projections of healthcare costs. So we've got to solve this problem.

So what are the necessary goals of sustainable reform? I start with the premise it's not going to work unless it's bipartisan, I mean, not just practically and technically. I mean politically it's got to be sustainable that way.

In my view, for it to work and for it to be bipartisan it's got to cover everybody, but it also has to pay a lot of attention to improving the delivery system. One quibble I would have with Stephanie is that I think there is actually a lot more attention devoted to delivery system efficiency things than is typically the case in a presidential campaign, anyway, and I would say in particular in what's going on in Congress right now.

And that leads me to conclude it is possible to achieve something I call practical idealism, which is how we can, indeed, cover every American and make our system sustainable in the long run in a politically sustainable way, and that means in a bipartisan way.

So what does bipartisan really mean? Well, for Democrats, of course, it means cover everybody, and it means pay particular attention to taking care of the low income and the truly vulnerable, the sick. For Republicans it means you've got to use markets, you've got to use incentives, and you have to have a real budget constraint. We are not going to write a blank check to cover 47,000,000 Americans. It's not going to happen. I would argue nor should we, and therefore you've got to have a budget constraint.

Now, how do you cover all in a bipartisan way? And here we get to what Stephanie called the placebo effect, but I submit to you you've got to start with what markets are not working now. And it seems like it's fairly easy to reach a conclusion, a consensus, that the individual market right now is not working very well except for the relatively healthy who are relatively well off.

So some self-employed are there, maybe half, but for most people who don't have a lot of money or who have a health condition, the individual market cannot work. So you've got to change that marketplace.

Similarly, small businesses. You know, the head of NFIB will tell you the single greatest impediment to business formation in our nation is worry about how I'm going to be able to get healthcare for my workers because they've got to compete with larger firms who have an easier time.

So we've got to make a market work. Well, how do you make a market work? And it's kind of interesting, I would say. In a sense, we need smart regulation. I know for some people that's a contradiction in terms. But I would also say it's better than dumb regulation. Let me lay out how this could work.

What you want is a market that works for everybody that's also efficient. So to work for everybody you have to have guaranteed issue. You absolutely cannot discriminate on the basis of health status. You could have, instead of pure community rating -- although that's what some would recommend. You could have age rating, something like that.

But what you want to do to get at some of those very high costs Stephanie talked about, you want to reduce the incentive to perform those tasks. The reason insurers spend all that money on underwriting and marketing is because they have to decide how much more to charge me than to charge Tom. There's just no other way around the way -- they're not charities. They have to do this right now.

If you made guaranteed issue the law of the land and you made modified community rating the law of the land, then a lot of that money spent on administration would go away because there would be no incentive to do it. But in my technical opinion you can't do that.

You can't put those rules on insurers unless you also have an individual mandate to force everyone into the market so that you make the market the population. If you don't do that, you're going to have adverse selection. You're going to have very much risk of only the unhealthy coming to buy. If you have a rule that says you must sell to all but no mandate, then what you will get is a very unhealthy pool, and that will drive the average premium up.

The Massachusetts experience is that if you have this mandate and you get a lot of people in -- in fact, the risk pool has gotten better, and I think there's evidence that's just come out fairly recently that the average premium per person for the same policy is lower now than it was before the reform, and that's solely due to the risk pool being better over time. At least, that's what John Kingsdale, who runs the Connector, seems to think.

Obviously, you would never put a mandate in place unless you're willing to make the social commitment to make it feasible for people to buy. You have to make it affordable for the low income. Otherwise it would be unconscionable to mandate it.

And so you've got to then think about what should that minimum benefit package be, and I do think that's probably one of the more difficult ethical issues. My economist solution is to punt on that and to not define it but to let there be an actuarial value target.

And by that I mean pick a number that's some fraction of some benefit package that everyone knows. Let the market give you different alternatives but have the minimum be that actuarial value, which will reduce adverse selection and prevent you from having to decide whether you cover chiropracty or plastic surgery.

In my view you don't have to organize a market at the national level. In fact, the one thing I've learned in my career in looking at healthcare markets is that healthcare markets are local just like politics. They're very different. It's a big diverse country. You probably want those market loci to be as close to local as possible. That may mean in some cases statewide, but it could also certainly be below that.

And, finally, my view as an economist going back to the international competition point, we have to think about ways to reduce the employer role over time. It turns out, as I think Jim is going to talk about, one of the ways you can finance this is to use the current tax expenditure we now have.

That is to say, we exempt from income all the employer premium payments. If you use that money to turn around and turn it into subsidies and finance people, (A), it's cheaper; (B), it allows you to reduce the employer role over time, and I submit to you that's the best way we have to guarantee middle-class jobs going forward. And there are some bills in Congress that talk about that.

Now, I would be remiss to not point out that none of this is, in my view, wise, unless we simultaneously begin to address delivery system inefficiencies. We absolutely positively cannot ignore this because if we don't, none of us is going to be able to afford healthcare very much longer.

Delivery system efficiencies are the key to making this reform sustainable and believable, and I would submit to you there are basically three big pieces here. We need an information system, electronic records accessible by all physicians.

We need realigned incentives. If you gave an economics grad student class the assignment of finding the piece of the American economy where the incentives were the worst, the answer would be the American healthcare system. We pay people for doing stuff. We don't pay them for keeping people healthy. We don't know what we're buying.

And, finally, we need to really increase best practice information production. That is to say, we need to improve the science base so that more clinician/patient encounters can be the beneficiary of best knowledge. And, of course, the information system allows that knowledge to be transmitted quicker if you have the right incentives in both patient and provider.

And then we have to be mindful of the fact -- and I think, again, the Massachusetts experience has shown this -- if you give people coverage and you don't increase the primary care physician workforce, there's a shortage of primary care. You might have heard this rumor. We have to fundamentally think about turning that battleship, as well, over time.

Basically I think I just went through this. We need electronic records. They have to be accessible. We've got to have a researchable database. And the piece of electronic system that's more than just records, let me just hasten to add, is decision support tools.

It turns out when people are presented with a very balanced appraisal of what their prognosis is -- maybe that's done by a videotape, maybe it's done by consultation with an expert or whatever. Often, families, clinicians will make decisions that are different than they would in the absence of that information, and it seems to me as an ethical matter we need to make sure every decision has that.

Realigned incentives -- well, you know, I'm an economist, so I'm going to tell you payment is going to rule the world. But I will say we have to move away from fee-for-service medicine. There is no question in my mind or I think a lot of people's minds that fee-for-service is part of the problem.

It was probably the right thing to do when we knew almost nothing. That is to say, you don't want the incentive to do less if you don't know what's going on. But it seems to me we're far enough advanced now in appraising quality and appraising best practice that we can move away from this.

And that means some combination, and I don't in any way have a blueprint here to tell you what we've got to do is a bunch of experiments to get better at this. And some of the recent work in the CMS, in the Medicare Modernization Act, which Jim had a lot to do with getting passed, started us down those roads. But basically a medical home -- the concept there is you actually want people to connect to a primary care base from which they sprang into the system. That home becomes an agent for them and helps them, but you've got to pay that home. You've got to pay the primary care docs to actually be able to provide more coordinated care.

You could imagine a world in which we share savings with them against a baseline that had too much hospitalization and so forth. But ultimately we're going to have to figure out how to bundle payment across sites of care because you can't just turn primary care docs against the hospital industry. You've got to figure out a way to make this win-win. In fact, there's some very interesting experiments going on as we speak.

Value-based cost-sharing. What I mean here is that it seems to me it makes sense that if proper evidence would suggest you don't need an MRI for this particular condition and you want one because your cousin got one, you can have one. It's America. You get to pay for it. We've got to stop collective financing of low-value care.

Similarly, you can imagine behavioral incentive-based premiums in some of the recent legislation, which I'll talk about in a moment. There's some ideas of giving Medicare beneficiaries, but you can do it across the board, a premium reduction if they agree to join a medical home, if they agree to put themselves in a situation where they have a better chance of getting coordinated care. And you can do the same thing for weight loss and smoking and so forth.

And, finally, there's no question, we can't move forward as a nation in this arena unless we take malpractice reform seriously. That doesn't mean that I know exactly what to do. I will just say it seems to me some combination of safe harbor for following best practice.

We've probably got to revisit anti-trust law because a lot of reporting isn't done out of fear of anti-trust reprisal. And we've got to probably think about damage limits, although I leave that to experts to work out the details.

For best practice, this is where I get controversial, if I haven't already, and that is to say, here are the two numbers that really worry me. We spend 28 billion dollars as a nation searching for serendipity at NIH. We spend 15 million trying to decide the best practice, the comparative effectiveness information.

I can't tell you what truth is, but I can tell you both those numbers are wrong. We ought to spend less on serendipity and more on comparative effectiveness because that will enable us to get far more efficient.

I think there is no reason not to have public and private funding of that comparative effectiveness funding. You're going to have to have a very credible -- I say quasi-independent. I mean independent government. You've got to have a credible body that sets research priorities.

And I would submit the fundamental fear of this shift in resources will come from the med schools. So you want to reward med schools who are willing to do this. You're going to have to raise the prestige -- let's be frank -- of comparative effectiveness kinds of research as opposed to the serendipity research, which is what the research apparatus has always gone for.

Workforce -- we clearly need to emphasize primary care and not forget we need more nurses because we are aging. It's not just about docs.

Okay. Now, take a deep breath. Here's the good news. If you look at the campaigns like I do, the good news is the Democrats have discovered markets. You know, if you go back and look at campaigns past, every single time some of the major candidates always propose what Steffie just proposed, and that is a government-run system, which would work, technically, but would have some issues that we'll talk about a little bit later.

This time, only Kucinich proposed it, and Kucinich was the first one to drop out. So that says to me the Democrats are starting to get the memo that if you talk about markets and you talk about emphasizing both, getting everybody covered and delivery system reform, you can actually be more credible.

And the good news on the other side is Republicans have acknowledged that people can't afford health insurance. McCain has gone so far as to say, "You know what? We need to think about the supply side, too." He's got pay for performance, transparency, Medicare payment reform. These are things the American Medical Association is not keen on. Whatever else may be true, McCain is still a maverick in healthcare, and I would give him high marks there.

I don't know if you got a chance to see Huckabee's speech before he dropped out, but it's the best one on this topic. If Huckabee was giving this talk he would say: "If we were having this meeting 40 years ago, half of you would be smoking, and the other half wouldn't care," and he would be right.

And his point is we can change the way we think about our own responsibility for our own health. We can change the way we think about behavior. And he also would go on to say: "If we don't change the way we think about our own responsibility for our own health and we don't change our behavior, it doesn't matter what the economists work out on financing, we're not going to be able to afford this."

Finally, I would say Romney in many ways made this national conversation possible when he was governor. If you go back, there was not a comprehensive proposal on the table until Romney did this. And I submit to you the following: You had a Republican presidential aspirant willing to use the word " all," and you had a Democratic legislature, arguably the second-most liberal on the planet, excelled only by California, willing to accept the word "limit." That's not an entitlement up there. That's an appropriation bill. Republican, "all;" Democrat, "limit." We can work with this. We can make this happen. That's exactly what I'm talking about.

Meanwhile, back in Washington, Massachusetts and California got noticed, and there were some strange coalitions that got formed. The most interesting one is this one, Better Healthcare Together, because on the stage in Washington in January of '07, about two weeks after Schwarzenegger announced his plan in California to try to mimic Romney, Lee Scott from Wal-Mart and Andy Stern from SEIU shook hands on the stage.

And you know those are people who spend millions of dollars every year attacking each other. Their constituencies, trust me, were quite upset that they were willing to go public and shake hands and agree to work together to try to solve the healthcare problem.

Lee Scott 's part in the drama was to say, "You know what? We've got to work together, and we're going to need more government." And Andy Stern 's part of the drama was, "And we can't just tax business to pull this off. We have got to figure out a better way to do this." So, again, I consider that progress.

Trade associations, a lot of them here. The most interesting one is the Federation of American Hospitals, the for-profit hospital association. Executive director is Chip Kahn. Chip Kahn invented Harry and Louise back in the day. Chip is on our side now.

Chip has figured out that, in fact, a new market, individual mandates, subsidies for low income -- all that stuff is a way to solve the problem and, in fact, is consistent with Republican values, which is the key, and here is the real interesting thing going on in Congress right now.

A truth-in-advertising, I helped Senator Wyden, and I'll be glad to talk about that in detail later. But here's what's good about this bill: not the specifics, per se, but the fact that it's got 14 co-sponsors, seven Republican, seven Democrat. We looked. We cannot find another example in history where you had bipartisan support for covering all Americans. And now we've got actually four versions of that same kind of idea. And the idea is basically the placebo model.

It is mandates, new markets, subsidies for low income, phasing down the employer role, using regulation, and using incentives to try to make the system far more efficient.

You're going to hear a lot of talk and a lot of debates and a lot of words, and here is what I would say you need to prepare for: You're going to hear, "We can't afford it," whatever "it" is. You're going to hear, "We can't afford to cover seven more people. We've got to cut Medicare." You're going to hear that. I submit to you we can't afford not to. We can talk about why later.

My favorite phrase from Ronald Reagan, you're going to hear, "Trust, but verify." What is that about? That is about we're going to demand and finally get transparency of price and comparative quality. We're going to know that market outcomes have to be monitored, and we're going to have to agree to evaluate government programs because they're not all working as well as some of the advocates would indicate.

You're going to hear, I think, a big debate about whether shared responsibility is also the American way. There's no question our country was founded upon and was made great by and will always be served by individual personal responsibility.

But there's also no question in my mind, anyway, and I think in a lot of people's mind, it's not possible to empower individuals unless the community takes an active role in making it possible for every individual to reach their potential.

And that's really what the mutual obligation is about, and that's where I get my stuff from the Bible. Part of the shared responsibility is making this system sustainable, and that's what I mean by stewardship.

And, finally, I'll remind you the cost of doing nothing is high. You go back to those 18,000 lives. If you count every year since 1994 until now, multiply 14 years times 18,000 -- it's a hard thing to multiply -- it's a quarter of a million people.

If we had told our nation on the floor of the Senate when we stopped debating the Clinton business, "We'll wait until a quarter of million Americans die before we talk about this again," I think we would have kept the debate going, and we should have, and we can do better next time.

Let me stop here, and then we'll talk about the moral stuff a little bit later on.

CHAIRMAN PELLEGRINO: Thank you very much. Our next speaker is Dr. James Capretta, Ethics and Public Policy Center, speaking of tax code.

MR. CAPRETTA: Thank you very much, Dr. Pellegrino. I am not a doctor in either sense of the word, but I'm just a fellow and someone who worked in government for about 15 years, mainly in the healthcare arena. Two hard acts to follow, of course, but I'll do my best.

I want to start with just a little bit of background about where we are and why I see the debate involving episodic pressures to change. And I think we can trace our modern story really back to World War II when the federal government during the war allowed employers to offer health benefits as compensation to their workers when there were war-time wage controls. And the IRS soon followed by saying those would be tax-exempt.

That was sort of the two pieces needed to have a springboard to widespread employer-based health insurance coverage. And it started slow but really took off in the '60s and '70s and became very widespread.

So the sort of current status remains pretty much as it was, which is that those kinds of arrangements remain tax-preferred, that is, all the premiums paid by an employer do not count as compensation to a worker. And in general, premiums paid privately on your own do not receive the same treatment.

So by definition it became much more preferable for everyone to get their coverage that way. It became the way of choice, and in some ways it works pretty well. But it does mean that other ways of getting health insurance have not formed, and that has led to some of the pressure points, which are leading to our kind of debate today.

How much is this tax expenditure worth? It's going to be more than that now a couple of years later, but in 2006 it was worth about 201 billion dollars all in. That was federal income taxes not paid, payroll taxes not paid, and also state income taxes not paid. So this is a very sizeable incentive with lots of financial consequences.

Now, what are the advantages of this? The advantages are you can sell relatively stable risk pools with relatively low administrative costs in one sale, in a sense. You know, an insurance company -- you can go to a big employer and say, "I will cover all your people with one policy." They make one sale. That's it.

And by and large -- this may not always be the case, but by and large, especially large employers, one would not expect, on average, for them to be atypical in terms of their risk profile. So in general, if you're looking for randomly applied risk, going to employers in some sense is a good proxy for that. So the pools of risk for large employers in particular worked fairly well from an insurance perspective.

Disadvantages: Obviously, the employer owns the insurance. So if an employee leaves, they don't take the insurance with them. That's a big issue. Obviously, when people are in-between jobs, they aren't employed for a period of time, they leave the workforce for whatever reason, they have trouble getting coverage.

The dominance of employer-based risk pools also made it difficult for other risk pools to form because people found them less favorable. They didn't want to be part of that risk pool. They'd rather be part of a large employer risk pool. And so it became difficult and is difficult for other kinds of pools to form.

Economic inefficiency associated with job lock: People say in their jobs sometimes just to get the health insurance. Now, we have probably the most flexible labor markets in the world, the United States does, but even here this is still an issue. Especially in a time of global economic competition and trade pressures, mobility of the workforce is still very, very important.

The distribution of this tax subsidy is regressive. That is to say, more benefits go to people in the higher income brackets than in the lower income brackets. This chart just basically shows that in 2004 -- it's a little bit dated, but the point still holds -- people above $100,000 a year got about $2,800 worth in tax benefit from this. And take, for instance, the lower middle class, $30,000 to $40,000 only got $1,200 out of this kind of a tax benefit on average per household.

So the upshot of this is that when we built an employer-based health insurance system, it basically works well for people that are going from large employer to large employer, working for big companies, working for big institutional firms.

But for people in the small employment sector or otherwise not employed, it's unstable and insecure. This shows particularly the relationship between firm size and being either in public insurance or being uninsured. Obviously, if you're in a firm of under ten, the probability of being uninsured is three times as high as if you're in a large firm.

Cost pressure: I'll argue in a minute that this is very much related to the tax preference as it currently exists. But if you just do a straight calculation of per-capita cost divided by household median income -- this is not adjusted for the size of households changing over time, but it's close enough -- you just see that by definition incomes are not growing as fast as health costs. I think this is a point we all understand already.

So back to the same point Len made, which is what's really at the bottom of all this? Well, the root of all of this is the general agreement that there's widespread inefficiency in how healthcare is delivered. This is not a knock on all the physicians in the room. This is a knock really on systematic and disorganizational issues associated with connections between different providers.

We have a fragmented system with a lack of clear use of clinical data to try to figure out what best practices are. So there's huge and widespread variation in how medical care is practiced. Wennberg and others have popularized this data very well, New York Times stories every other month about it showing that essentially without differences in health outcomes, large variations in how medicine is practiced in South Florida versus Minnesota versus Salt Lake City and lots of unexplained reasons for that.

Now, one argument here, though, that is quite important is that the tax benefit itself is contributing to the cost pressure. That is, to some extent the argument is that when you have a tax-preferred fringe benefit like this that is without limit, on the margins employees have a preference for taking more health insurance versus more cash because it's not taxed. And then when you have more health insurance versus not as much health insurance, you also have lower cost-sharing. So there's a pressure to use more services.

The follow on point, which is that you could reform this and retain the tax preference or alter it in some fashion so that it was no longer open-ended, maybe at the margins, then saying that the choice between cash and insurance would be more neutral; therefore, employees and consumers would maybe select, perhaps, more cash income and not as much insurance, with favorable effects on the cost side.

I argue that even with all these points about the problems in healthcare we ought to be taking measured steps. That is, I think one of the lessons of the Clinton effort in the early '90s was that this system is very complex and there are a lot of embedded arrangements, some of which are working pretty well.

And the fastest way to lose an effort is to start disrupting things that are perhaps not ideal but at least working okay. And we can, I think, address this tax issue without disrupting coverage for the vast majority of Americans that are enrolled in large employer plans and generally like it.

So there's a sense in the country, of course, that there needs to be some change, especially on the delivery side. But at the same time, if you ask people that are working for large employers with employer-provided coverage, "Would you rather trade that in for something else," I think at the end of the day a lot of them are going to say, "Probably not." They'd want to take a look at what this other thing was, but they're likely to answer that they'd rather just stay with this and see how the thing plays out.

And so one aspect of reform I think we need to keep in mind is to address this tax question without undoing the whole thing and trying to have 170,000,000 Americans switch out of what they have today into something different.

So what would I do? This is a four-point plan. Maybe it could be 16, I don't know. What I would do is I would say let's start with the large employer plans and put a tax cap on it. Let's put a limit on how much can be tax-preferred, but let's not repeal it entirely so that people still, by and large, in large firms get their health insurance, at least for the time being, through their place of work.

That then sort of leads to additional cost consciousness for the HR departments and the employees of those firms, but it doesn't take them out of that coverage and try to invent a new way to give them health insurance.

For people not in large employer plans I think we've got to move toward a refundable tax credit. That is, for people in small firms and individuals not otherwise getting their private coverage through the employer, instead of giving them a tax preference the way we do it now, we ought to give them an actual almost like a voucher of some dollar amount that they can use to buy their coverage.

This is not all that unlike what they're doing in Massachusetts. It could be run through that kind of a mechanism. It wouldn't have to be.

The next step is really the critical one, which is who is going to help administer all this for these people getting coverage in a new way. I think we should leave that to the states. I think decentralization of this is critical. Trying to run it all through a national exchange would be a mistake.

And as Len pointed out, this is a big, diverse country, and even state by state is almost too centralized, frankly. States could do things like an exchange at the state level, although I think there are any number of different models this could envision. The main point is that the states will be in charge of establishing and enforcing some stabilization of the risk pools for people not in the large employer plans.

There would have to be some kind of rule-based system so that people would know they're in this pool and their premiums would be shared with this group of people and their tax credit would be used to buy this kind of coverage offered in the same pool.

Finally, I think the missing 800-pound gorilla in all of this is Medicare. I was struck by a -- which is really not the subject of your deliberations today. People in Medicare are covered, right? So maybe we ought to just stop there. But in some ways the entire health delivery system takes its cues from Medicare. Medicare is the biggest payer, the biggest purchaser in most markets. It is a fee-for-service program, by and large. And if you had to pick one reason -- it's not the only reason, but one reason why the delivery structure looks the way it does today, one would probably pick Medicare, that people organize themselves in a sense to be responsive to the Medicare payment structure.

And to my mind, if one is worried about efficiency in how healthcare is delivered, then one is going to have to probably look at how Medicare is buying care. And the Medicare Payment Advisory Commission just put out a lengthy report two weeks ago on this exact subject. Len kind of touched on it.

Lots of recommendations about bundled payments, trying to get physicians and hospitals to start accepting episodic payments or payments for a whole episode of care that is larger than our current DRG system.

So there's lots of creative things that could be done there, but I think lots of hard thinking is going to have to be done in this area for us to really make progress on the cost side.

Finally, I want to commend you. Truth in advertising, I stole a lot of this from Stuart Butler, who is an excellent analyst at the Heritage Foundation, and his paper is cited here at the bottom of this slide for those who would like to read on further. Thank you.

CHAIRMAN PELLEGRINO: Thank you very much, Mr. Capretta. I appreciate all of you speaking so that we are right on time, in addition, of course, to the content of your talks.

We can open up the questioning period by the members of the Council, following which after the break we'll have a return of our panelists who will speak about the moral dimensions of each of their plans.

Would someone like to open the question?

DR. CARSON: I just want to thank all three panelists for that. But I'd like to ask a question which could maybe help solidify our thinking, and that is we've noticed one commonality there is the enormous cost that we are putting into healthcare and the small benefit we're getting back.

What would you say are the two or three biggest things that drive our cost to the point where they are? Because I know a lot of people think that it's because physicians in this country make too much money. But only 19 cents on the healthcare dollar goes to pay professional fees. That clearly is not what is driving it. And if you could maybe clarify that for us.

DR. WOOLHANDLER: I think there's two big drivers. One is administrative costs. Administrative costs in our complicated multi-payer system are about 31 percent of total health spending. Administrative costs are about half that level in Canada, about 16 percent of healthcare spending. So that's one big driver. The second big driver is overtreatment and treating people who don't need treatment in the first place or treating people with very expensive treatments who could be treated with very simple treatments.

And the example I've been talking about the most lately is cardiac stents. We now estimate that at least half and perhaps as many as 80 percent of all cardiac stents placed in the United States are completely unnecessary. They're placed in people with chronic stable heart disease in whom stents have never been shown to be effective. That's a 20-billion-dollar industry right there, that one piece.

So those two things, administrative costs and overtreatment. The single-payer system does address the issue of administrative costs because you simplify the system, make it one system, everybody automatically eligible, every effective treatment automatically covered.

In terms of overtreatment, the way that the single payer really works is a little analogous to trying to stop the flow of water through 1,500 or 300,000,000 different faucets versus having just one faucet, the single payer. It's just a whole lot easier.

You have a much stronger lever to reduce spending, to cut out unnecessary care if you have control of that one faucet versus all these thousands or millions of individual faucets, shipping money or, if you will, funds into the healthcare system.

CHAIRMAN PELLEGRINO: Thank you very much. Next question?

DR. NICHOLS: I would suggest it's very useful to distinguish between what drives our level of cost being so high and what drives the rate of growth over time. I mean, I would certainly agree that administrative cost is the reason our level is high.

And while it did have that increase in the early '90s as the country moved to far more managed care and far more administrative activity within insurance companies, it's been pretty stable since about '95.

So that's not what's driving cost growth. What's driving cost growth is the overutilization, and that comes back to the incentives. It comes to the lack of incentives. We have to be prudent on both the provider and the patient side.

But then I would say I think the fundamental driver, which has a fairly wide consensus among us, at least in the economic community, for what that's worth, is technology. Now, we're way better at fixing hips and hearts, even broken hearts, than we were 30 years ago, and that's a good thing. But it takes resources to do some of that, and I would say our fundamental problem comes back to incentives. We overuse good technology.

The stents are really helpful for a small fraction of the population. Vioxx was really helpful for a small fraction of the population. But it was used far more broadly than it ever should have been, and that's kind of almost a metaphor for the system.

MR. CAPRETTA: I very much agree with what Len just said. The only other thing I would add to that is that the United States does have some unique issues associated with a big country. We're very diverse. But sometimes our health system is asked to do so much more than other countries' health systems that some of those costs also spill into our healthcare system that they don't have to deal with as much.

We have a lot more social problems that end up in our healthcare system. International comparisons can be a little dicey. I mean, we do spend more than other countries, no doubt about it, but part of it is that people don't usually realize that a lot of it is associated with we have far more trauma showing up in our emergency rooms than other countries do from things like car accidents and gunshot wounds. And we also have a system that is picking up and referring people for chronic conditions at a rate that is much higher than other countries. That's somewhat still unexplained, but it has to do, I think, a little bit with just the intensity of use that we're used to here.

And, you know, our physicians are picking up earlier chronic conditions and getting people into more intensive therapy and care than they are in other countries. Now, whether or not that's leading to better health outcomes for those people I think probably remains an open question. But, anyway, we have a lot more people getting care in those kinds of conditions.

CHAIRMAN PELLEGRINO: Thank you, Mr. Capretta. Questions? Dr. Dresser?

PROF. DRESSER: I'd like all three of you to talk about this really tough issue of coverage, what to cover. Does anyone in the US do a good job on it? My impression is even Medicare doesn't do such a hot job on it.

I mean, things like covering a cancer drug that extends life for two months in 50 percent of the people -- in your notions of a better system, would that be covered? If not, who's going to have sort of the willpower to really enforce that?

And then even sort of less pointed cases like so many technologies, drugs and so forth -- there's sort of a gray area of patient who might benefit some. And, you know, it seems to me every system has to get a handle on that. So who's going to decide what to cover, and how is that going to be enforced?

CHAIRMAN PELLEGRINO: Any of the panel?

DR. WOOLHANDLER: Well, we believe that all effective treatments must be free, okay? There's two pieces to it. One is it's free, no co-payments or deductibles. The other is that word, effective. And if something is not effective it should not be covered, no matter how much someone is willing to pay.

I actually think the gray area is smaller than you think. I think you can say to a cancer patient, "Here's the data. This medication is very toxic. You're going to get a lot of side effects. You're going to have an average four extra weeks of life if you do it," and let them make the decision.

The decision is made very poorly in the current system because of the incentives we've given to oncologists to overtreat patients. The oncologists get paid a fee not just for the consultation but for running an infusion center so that oncologists are now the highest-paid US physicians, on average earning more than half a million dollars a year, by and large because they're doing all these infusions.

Consequently, according to an article in the Journal of the American Medical Association, you can take cancers and divide them into ones that are chemo-responsive and ones that are chemo-nonresponsive, ones that need chemo, ones that don't respond to chemo. It turns out in the US a patient with a chemo-nonresponsive cancer, one that won't respond, is just as likely to get chemo as someone with a responsive cancer.

Now, that's a violation of effectiveness. The doctors are not communicating with the patients. The patients aren't understanding it because no one in their right mind would choose chemo, I think, if it's going to be ineffective, yet they get it just as much as other patients. So this gray area -- a lot has been created because it's become profitable to overtreat people. If we take it from a scientific point of view, the gray area is much smaller than you might think.

DR. NICHOLS: I would certainly agree with that. I would say you've asked, though, I think, the question that is really hard. And I think I answered it sort of in one of the papers we sent. And that is, the fundamental moral question here is are the people going to believe who has to say no? How do you accept that? And it seems to me, therefore, you need public processes.

By the way, I would just take this opportunity to say whatever statement you all end up making will be important, and it will be read because I deal with members of Congress on a daily basis. And I will tell you, they are grasping for wisdom and leadership on this matter, and you have a standing that very few other groups do. So I encourage you to pursue this.

But let me just say on the public processes it seems to me there has to be credible scientific evidence, as Steffie talked about. You've got to fundamentally get the word out. To me that means it's got to emanate from and reside from a combination of public and academic and -- it's got to be blue ribbon.

But then you're going to have to work it through every clinician/patient encounter. At the end of the day you are not going to be able, in my view, to draw a line in Baltimore or Washington or Peoria or Springfield and say, "We're not going to do this. We're going to give you the options. We're going to give you the information. We may give you a co-pay schedule that reflects our best judgment and the collective budget we agree to set, let us not forget. We're not going to write a blank check."

But I would certainly agree with Steffie, if you go back and look at all the excess use that is out there now -- I mean, very different people from very different methodologies estimate it's as much as a third of our healthcare dollar. There is so much fruit that's hanging fairly low. We're a long way from what I will call serious rationing issues. We could adopt them if we choose to. We don't have to.

CHAIRMAN PELLEGRINO: Mr. Capretta?

MR. CAPRETTA: Thank you. I agree with Len's last statement. To my mind, there are so many other things to work on in healthcare delivery that kind of going right to the hard cases is probably just not worth the political energy, that I'd try to leave most of that decentralized.

And if you get the incentives right, the provider, hospital, physician, outpatient clinic, lab systems will, in a sense, reorganize themselves to start handling those cases with patients more systematically and perhaps, hopefully, more scientifically. That's the idea of reform, in any event, under our competitive structure or perhaps under a single-payer structure.

I'm very worried about going right to centralizing decisions about hard cases at the national level. I think that would be a huge mistake. I, for one, wouldn't trust it. I don't think a lot of Americans would trust it. There isn't enough of a common value base to cede those decisions to bureaucracy at this point. That's my own opinion.

DR. NICHOLS: I would just hasten to add, we've already heard from Oliver Wendell Holmes once today, I believe. I'd like to add another one: Hard cases made bad law.

CHAIRMAN PELLEGRINO: Dr. Hurlbut?

DR. HURLBUT: I can't seem to find what I'm looking for in your paper. I think you mentioned something about the system in the United Kingdom where there's private availability at the same time as somehow eroding the national health service. Have I got that right?

DR. WOOLHANDLER: Yes. Our group has advocated the model that they have traditionally had in Canada. They actually have similar models in some other northwest European countries where there's a single public system. There's not competing private insurance.

In fact, competing private insurance is banned in Canada. That's not un-American. We actually have the same rule within our Medicare program. That is, we cannot sell private insurance that competes directly with Medicare in this country. There's obviously recently a whole range of privatization options, but traditionally you couldn't sell it.

The reason we do that is in countries that have a private system and a public system, the private system tends to erode the public system, and that's what we saw in Great Britain where I believe the British National Health Service has been woefully underfunded.

And part of why it was underfunded was that rich people like Margaret Thatcher could always opt out. They didn't have to wait in the queue to get their gallbladder operated on. Margaret Thatcher could go, jump the queue by going to a private clinic, and get her gallbladder out. So the rich people had no particular reason to assure an adequate level of funding for the poor people.

And I think the exact same process is seen in the Medicaid program in this country. No one rich gets Medicaid, so rich people have no real personal incentive, other than charity, but they have no real personal incentive to make sure that Medicaid funding is adequate. If it's a program for poor people, it's a poor program. The trick to getting a program to work is to make it universal, rich people, poor people, same program, same rules, same access to care. That way the rich people will use their political power to make sure that the plan has adequate funding. And I do think that's what happened in Canada and northwestern Europe.

DR. HURLBUT: Well, let me now ask my question, having clarified that that's what you say. Are you saying that basically people that are very wealthy would now have access only to the same care that everybody else had? I mean, you spoke about -- I can't remember what your phrase was, the impeccable logic but the failure of political -- I can't remember what your phrase was.

But in any case, it sounds a little unrealistic to me. I live in a very wealthy community where a lot of dot-com people live, and there are now boutique medical practices with people just paying whatever they need to, basically, to get the best possible care. Are you saying that wouldn't be part of your system? And wouldn't that, in fact, encourage a lot of -- if it were that mandatory, wouldn't it encourage outsourcing to other countries for superior care, and wouldn't it be kind of an odd thing to human nature, maybe economically impeccable but politically unrealistic to expect really wealthy people not to seek out what are considered superior offerings?

DR. WOOLHANDLER: I just want to point again to the Medicare program. You cannot opt out of Medicare in this country. I mean, when Ted Kennedy got his brain surgery at Duke, Medicare was the first payer. No matter how much money he may want to pay out of pocket, want to use to buy his way out of the system, that hospital was primarily paid by Medicare. Now, he can have wraparound insurance, but he cannot purchase a private health insurance policy that substitutes for Medicare. That's why Medicare has historically maintained adequate funding over the years, that actually, you know, as a doc I was happy to see a patient had Medicare. It meant I was going to get reimbursed well.

And that's because rich people and poor people had to rely on it. Ted Kennedy legally had to rely on Medicare. Now, if he wanted to go to Riyadh, Saudi Arabia, or something and get his care he could pay out of pocket. But if he wanted to get care in the United States it had to be paid for by Medicare. I think that's politically completely realistic.

DR. HURLBUT: Well, take the question that Rebecca asked you earlier and take, for example, the case of in vitro fertilization. I've been following that a little bit in the United Kingdom, and it's created quite a lot of controversy because there are considerable restrictions on it. For example, there are now discussions, I think, of implementation of restrictions on people who are obese from getting in vitro fertilization cycles because their outcomes are not as high.

Now, somehow it sounds very problematic. You're going to essentially not even offer what the United Kingdom does by way of a private option. You're going to sort of mandate that everybody gets what everybody else gets.

DR. WOOLHANDLER: That's true. I'm following the same law that we've had in the Medicare program on the books since 1966. And, again, to quote Len here, you know, hard cases make bad law. I don't want to go into the obesity-related issues of in vitro fertilization here, but we've had this law my entire practice lifetime, that there's no insurance that competes with Medicare.

Now, our Medicare program is only for people over 65 and some of the disabled. It was not a 100-percent coverage program. It only pays a little more than half of the healthcare costs of the elderly. So I'm not advocating exactly the Medicare program, but I'm just saying in terms of the legality of saying that we're not going to allow private insurance to compete, that's been on the books since '65, implemented in 1966 with the Medicare law.

CHAIRMAN PELLEGRINO: Dr. Meilaender?

PROF. MEILAENDER: This is just a brief sort of follow-up on Bill 's question for you, Dr. Woolhandler. Would you think maybe we should reason in the same way about higher education in this country? Private options diminish the quality of public, you get quite different sorts of education. People's resources make different things possible. Would you like the same kind of reasoning to apply there in that area of life?

DR. WOOLHANDLER: Well, by way of disclosure, next year I'm going to be paying $50,000 to each of Yale and Princeton for my two daughters. But I do live in a state where I feel like the private education has eroded public education. I think if I lived in the state of California, it's very likely my kids would be going to Berkeley or UCLA and I'd be saving a lot of money. I'd be very happy about it.

But our state system in Massachusetts, while it's got a lot of positive things about it, has been weakened by the strength of private universities: Harvard, MIT, et cetera. So I think it's not particularly fair that my kids can go to Yale and Princeton because I can pay for it.

As a parent I'm willing to do that, but as a moral person, as an ethical person, I don't actually think my kids should have any more right to go than a poor person's kids who was equally qualified.

PROF. MEILAENDER: You actually think that what you're doing is wrong, then?

DR. WOOLHANDLER: No, I actually don't. We're talking about a policy situation. Once the policy is in place, you make your individual decisions based on what's going on. It's not wrong for me to take a payment from Blue Cross even, as I say, that the payment from Blue Cross should not be higher than a payment for a poor person who is now uninsured. But we to change the policy so everyone has equal access to education, a policy so that everyone has an equal right to health care.

CHAIRMAN PELLEGRINO: Other questions? Yes, Professor Gómez-Lobo.

PROF. GÓMEZ-LOBO: This is a very brief question. Can I buy Harvard shares?

DR. WOOLHANDLER: Are you asking if you can buy the physical chair or the chair --

PROF. GÓMEZ-LOBO: Shares in the market.

DR. WOOLHANDLER: Shares.

PROF. GÓMEZ-LOBO: Shares. I'm sorry. I apologize. The reason, of course, is that my understanding was that these are non-for-profit organizations. I mean, we can't compare them to the insurance companies, can we? I mean, I can buy Prudential shares any minute. And may I address a quick --

CHAIRMAN PELLEGRINO: Absolutely.

PROF. GÓMEZ-LOBO: One of the questions I have in the back of my mind is if I bought shares from Prudential or Aetna or any of the other ones, what I would want to happen is that they not sell policies to people who are high risk and concentrate on the nicest all-American people they can. So the question is really what are the incentives there such that they don't go against the very basic idea of a health system?

MR. CAPRETTA: Private insurers -- what incentive do they have to take on unhealthy people? Well, I've never advocated an unregulated private insurance market. I think we do need to have risk pools and people need to be able to enter into risk pools under certain circumstances.

I mean, ideally, if you had everybody in some kind of insurance from day one, then, you know, you're always insuring against unknowable risk. The problem is that you have a situation now where people can present themselves with known risk. And insurers in a private insurance model, you can't have premiums that are not covering a known risk because you by definition are going to lose money.

So you have to either pool that known risk with lots of other people with known good risks, or you have to have some kind of way of transitioning from risk pool to risk pool so that people can still have access, even as insurers get a large portion of good risk with bad risk.

So there's a rule-making aspect of this that's critical. I don't deny that at all. I think it's one of the thornier parts of any reform, no matter which direction you go.

DR. NICHOLS: I would just add that part of what the reform conversation is about is about setting the rules so that these markets work in different ways. And what I find is intriguing, if you look at the California discussion, which I find instructive even though they decided not to do it, you had six insurers there that agreed to the rules I laid out: Sell to everybody, modify community rating, and mandate so the pool would be the population as opposed to just the sick.

Six insurers, three nonprofit, three for-profit, agreed to this. But one big for-profit opposed it. It turns out the six that decided to do it are actually already investing in information systems and provider network that they think they can actually value to people's lives by managing care, by coordinating care, by giving us better health outcomes.

The one that didn't want to play along is the one that wanted to hold to the old model of making money. It's just like you described. Those are two different business models. I submit to you that value added through care management is the future if we want to make our system efficient. The risk-selection model is the past, and that's what we've got to change the rules to move away from.

CHAIRMAN PELLEGRINO: Dr. Rowley, and this will be the last comment before the break.

DR. ROWLEY: I was struck by Dr. Woolhandler 's graphs on the uninsured in various states that have gone to some kind of, quote, universal or at least paying for insurance for underinsured people. And every single one of the -- over a number of years the graphs saved close to 10 percent.

So my question is actually to Len. How would you interpret that? You're proposing some form of -- my assumption is that you're proposing something akin to Massachusetts or whatever in terms of modified plans and helping the uninsured pay for insurance.

And yet if her graphs are really correct, and I have no idea whether they are or not, but one state after another that has had some form of this hasn't changed the percent of uninsured at all over time. So what is it you're proposing to do that's going to make it different?

DR. NICHOLS: Great question, and let me first say I trust Stephanie 's numbers. She's a very intellectually honest person. I have no quibble with the numbers, but I do have a quibble with the interpretation of all those states as being implementing, if you will, my plan.

In the one case where they've actually imposed an individual mandate, that is, Massachusetts, they've reduced the uninsured by half. That's what the people who measure those folks up there in Massachusetts are telling us in lots of different ways.

So there -- and I would say the penalty at the moment that's in place is a kind of gentle one. It is one that is meant to be politically palatable in the transition phase. It is roughly now one-fourth the price of an insurance policy.

So a lot of young and immortals are still paying the penalty and not buying the policy. If you changed the penalty, life would be different. And that penalty, by the way, applies to people who have, by definition in Massachusetts, the income to afford it.

In the Maine, et cetera, cases -- in the Massachusetts case in the past, the Dukakis was an employer mandate, and it never really got passed. It never got implemented. In Washington there was an employer mandate, and they repealed it before they implemented it. In Oregon, same thing.

So what happened was people talked about the mandate, and I think it's fair to say in the Washington, Oregon cases they thought national reform was coming. They thought the national reform would take the form of the Clinton plan, which also had an employer mandate, and they frankly thought there would be federal cover to maintain the state employer mandate.

Guess what? The cavalry didn't come, and they all got repealed, and nothing happened. So the data are true, but they're not reflective of what the policy would be.

DR. ROWLEY: What's your response?

DR. WOOLHANDLER: Well, the data is from the census bureau, from the March CPS. So you can reproduce that data and that data is, of course, correct. We haven't had the Massachusetts bill around long enough to see the census data. There's a lag time on it.

It seems like Len and perhaps a whole group is going to hang your whole argument that this is something other than a placebo on the success of Massachusetts. But I want to tell you that those of us on the ground in Massachusetts are not convinced.

I mean, John Kingsdale is a very nice guy, and he puts a very persuasive case together about how great things are. But in my institution, the Cambridge City Hospital, the number of people showing up seeking free care has actually gone up by 1 percent in the last year.

When we looked at EDs at safety net hospitals there's been about a 3-percentage-point drop in uninsured people showing up. So places where they saw 20 percent uninsured they're now seeing 17 percent uninsured. But we're not seeing evidence of a 50-percent improvement in access to care.

So I'm expecting when the Census Bureau numbers come out we will see a modest improvement because we did a huge Medicaid expansion with one billion dollars in new money going into the system. I do think we'll see that, but I don't think we're on the road to universal health care based on what I'm seeing on the ground.

I do want to add, just in terms of making the premiums go down and the administrative costs go down, there's really very, very little evidence on that one. The connector, the board that puts people together with the private insurances, they are going to fund themselves with a surcharge of four to five percent on an insurance policy. So that's an additional four to five percent on top of administrative costs, so it's very hard for me to believe that somehow we're going to make that up somehow and end up with lower administrative costs.

CHAIRMAN PELLEGRINO: Mr. Capretta, a brief comment.

MR. CAPRETTA: Thank you, Doctor. He's indulging me for a minute. We're over time. Just on the empirical basis of the uninsured, no doubt Dr. Woolhandler 's data is correct. There are lots of other studies, though, that did go another level on this, which I think is worth mentioning so that people get their same baseline.

In some ways the data that looks at a point in time as both -- you know, overstates and understates the problem. You have lots of data that shows upwards of 85,000,000 people have at least some month without insurance over a multiple-year period of time. So there's lots more than just 47,000,000 who go uninsured. But many of them are in hiatus from insurance because they're in between jobs, largely.

And it turns out a lot of times it's the same people over and over and over again, and it's the same people that I showed on my graph. They're working for small firms. They're unemployed. They're employed. They're on public insurance. They go off public insurance. There's a lot of churning on the low end of our market.

These other state efforts never really got at the issue of can we find a way to give those people insurance even as their life circumstances change. They get married. They get divorced. They get a job. They lose a job. They work seasonally. That's where all the churn is. That's where all the uninsurance is.

Second point is that there's huge numbers in the uninsured data of people under the age of 30. I think we have to have a real question about what do we need to do for those people. I mean, it's upwards of 30 to 40 percent of the uninsured. Correct me if I'm wrong, but that's about right.

So I think there's a real question about how to handle insurance for that population. It's not necessarily the same answer as everybody else. Then there's the question that's going to be vexing for our country, which is why this is an important issue, which is noncitizens. What is our obligation to noncitizens? How do we handle them? How do we give them healthcare? All of those complicate this debate.

CHAIRMAN PELLEGRINO: Thank you very much. We'll extend our break to 3:55. Please be back promptly because we have an important discussion after the break.

CHAIRMAN PELLEGRINO: I'm going to move ahead and ask each of these panelists to briefly state why they think — I hope this isn't too aggressive a question — why they think the program that they're most closely associated with is a morally acceptable one or perhaps if they're really bold, want to say why it's more moral than any other one.

But, really, we're talking about how they feel about the ethical implications of what they're saying. And they've agreed in our little huddle here that I'm to go off tackle but they are to present quickly and expeditiously, and then we have two members of our own Council to open the discussion.

However you want to go and in whatever order, whoever speaks up first and be first.

DR. WOOLHANDLER: Well, I think that the single-payer proposal is the only ethical one on the table because it's the only one with proven effectiveness. I think that many of these proposals up here are known to be ineffective. They've been tried, and they failed. Perhaps the best you could say about some of them is they're an experimental treatment.

So I just think if we're concerned about 18,000 deaths each year from lack of health insurance, we're actually obligated from a moral point of view to go with something that's proven, which would be some form of nonprofit national health insurance.

CHAIRMAN PELLEGRINO: Thank you very much. A workable plan is a morally defensible plan.

DR. NICHOLS: Well, as I think you know, I base my vision on my interpretation, and I'm not a theologian. I am a simple country economist, but I base my plan on interpretation —

CHAIRMAN PELLEGRINO: We'll give you a choice.

DR. NICHOLS: — my interpretation of Leviticus, which I believe was continued in many ways in the traditions that followed. And what I like about that vision of the prophet's description of community is that seems to me to be the only way to reconcile all the conflicting forces at work here.

On the one hand, you had the admonition to leave food in the field. Why? For the widow, orphan, stranger, for those who could not have eaten otherwise. So preventable starvation was unacceptable.

In my view, health care has become like food, a unique gift. We absolutely know people will die without it. It was unacceptable to let people starve back then. It's unacceptable to let people go without health care now. In my view, those are morally equivalent.

But what I love about the gleaning metaphor in Leviticus is that it does not say, "Give the same amount of food to every person." It does not say, "Give all the food to one person who happens to be hungry." It does not say, "Bring the poor home and cook for them." It says, "Leave the food in the field, and the poor have to go get it."

So there's a mutual obligation. There's a mutual responsibility, and that's why I see that reflected perfectly in the combination of personal responsibility, including individual mandate to purchase, and shared responsibility, that is, to make it possible for each individual to achieve their own objective.

CHAIRMAN PELLEGRINO: Thank you very much. Mr. Capretta?

MR. CAPRETTA: Well, I think the program I put forward is the ethically appropriate way to proceed for several reasons. First and foremost, the more that financial resources are put in the hands of patients and consumers to make decisions, the more the system is responsive to those patients and consumers.

In other words, complex organizations respond to whoever is holding the purse strings. That's just a fact of life. And to the extent that, with oversight, a market can be set up so that people are selecting and purchasing care with the individual more in control, the system will become more responsive to what they want. And I think that is fundamentally putting the patient in the center of the system.

The second is that I think it's the most practically plausible and workable approach. It deals with the system as we have it and makes changes from there to improve efficiency and market incentives without undoing everything and trying to start over.

And I guess the third thing is that it doesn't cede to the federal government all centralized control, which I think for a lot of people would be troublesome in the sense of many medical ethics questions would all end up getting handled probably in the governmental bureaucratic sense, which I think would be problematic.

And, finally, controlling costs is either a matter of efficiency or queuing, in a sense. And market incentives, financial incentives with oversight can get to more efficiency, trying to do things where people decide on their own that this is less valuable than the price we've been paying and not doing it anymore, which I think is better than just putting people in line a little bit randomly.

CHAIRMAN PELLEGRINO: Thank you very much. I'm going to ask Professor Carl Schneider and Professor Gómez-Lobo to open the discussion, and then there will be an opportunity for the panelists, who have been very faithful to my request in being brief and to the point, to expand on their own impressions.

DR. SCHNEIDER: I take that as an implicit invitation to be brief, so I will ask one question. We've now heard from a number of people who have a number of different analyses of the present crisis, if that's how — I shouldn't have used that word — the present difficulties in American health care.

And many of the people have spoken with extraordinary confidence and force and have been quite willing to say that the alternatives to their program are highly unsatisfactory. These arguments are all based on data and empirical evidence and arguments that we are entirely incompetent to evaluate. And I take that to be common ground.

DR. WOOLHANDLER: I don't understand your point. Why would you be incompetent to evaluate these arguments?

DR. SCHNEIDER: Because, for example, I think that there are other ways to read the Rand study than the one that you suggested. In order to take the argument about the Rand study seriously, we would need to look at the Rand study to see what it said.

So my question is is there any useful role that we can play, given that we are incompetent to choose amongst the many programs, not just today, that we've heard about?

CHAIRMAN PELLEGRINO: May I ask the panelists to hold until Professor Gómez-Lobo has his chance to open the discussion. Alfonso?

PROF. GÓMEZ-LOBO: I'll probably be not as brief as Carl, but brief enough, I take it.

What I'm going to do is I'm not going to enter into the merits of each of the three proposals because I take my task to be to take the different views we have and to try to reach some basic ethical view that I hope might govern our own deliberation about this.

Now, we have heard quite a bit about helping the poor or helping the needy, and I disagree with that. I'd like to argue that universal coverage for health care and therefore access is an ethical issue in the sense that it's a question of justice. It's not a question of charity. It's something that we owe to each other. And I would like to make a brief argument to show that.

It seems to me that when one joins an insurance group, what one does is one enters into a kind of covenant in which those of us who are healthy are going to pay for those who are ill at that moment in exchange for reciprocal treatment at a later date. So I'm healthy, but if I'm sick, you are going to have to pitch in from your contributions to help me.

Now, I don't take that to be charity or care for the poor. I would use the old Polish word solidarity. And so if an insurance group, assuming profits are reasonable or don't exist — an insurance group is practicing that virtue. And then the question I raise for myself is, well, why don't we extend that to the whole country? Why don't we accept the fact that we all share in a political community? We're all in pursuit of flourishing. Health and therefore health care are goods that we distribute among ourselves in such a way that we owe to each other certain services, certain benefits.

Now, this, of course, creates something that may be called a positive right. Someone has a right to the behavior of someone else, and I'm very anxious to hear what's going to happen tomorrow in our discussion of the American political panorama because I'm aware of the fact that there are people who argue strongly for negative rights, for the idea that I have the right to be left alone.

And, in a way, we have had that appear in the papers we have read, the question of those who could have insurance because they have the resources and do not buy insurance. What do we do with them?

Let me leave it at that. I know this is somewhat provocative, but I would say that the goal, the ethically basic goal of any proposal for reform of the American health and health care system should be coverage for all as a matter of justice and not as a matter of charity.

CHAIRMAN PELLEGRINO: Thank you very much, Alfonso. Now, the panel has an opportunity to respond and expand. We can start with Dr. Woolhandler.

DR. WOOLHANDLER: I'm again just a little amazed at the comment that this group is not prepared to decide on these questions. There are so many IQ points in this room, and people spend so much time thinking about ethics. I mean, the material I present is not rocket science. The Rand study is not rocket science, either. There's a book about this [holding her fingers about an inch apart] thick that you could probably read in an evening if you want to read it yourself.

So I think saying we're not prepared to decide is actually saying we're going to step away from a problem that we recognize is very serious and is resulting in 50 deaths today as we meet here and 18,000 deaths a year in the United States.

DR. NICHOLS: I would just like to say to Dr. Gómez-Lobo your concept of justice and my concept of community are the same, that in fact — and I think it will allow me to answer Professor Schneider 's question. What you could do that would be phenomenally helpful would be to say, "We ought to do this as a nation for justice or efficiency," whatever reasons you believe, and just stop there and leave the details to the process.

I mean, I believe it was you this morning who said, if I'm not mistaken, once you get into a negotiation, then ethics often gets muddied. I agree. You've been to Washington ; I have, too. That's where we live. But I will say, that's the best we've got.

And the thing is, if you don't help them start from the ethical starting point, it's going to be harder for them to come to an outcome that approximates justice. And I would submit what I believe — and I agree with Stephanie, it's an experiment that we're talking about that I think has a chance of bipartisan support — but precisely because we are at a place in our nation where right now we do have a chance.

We can see it within reach because those 14 senators have agreed to put their reputations on the line and take great flak from their colleagues to say, "Here's a way we could maybe agree with this. Let's talk about it to get ready for the '09/'10 discussion, regardless of who wins the White House."

DR. SCHNEIDER: You say "Let's do this. It's possible." What is the "this" to be done?

DR. NICHOLS: I mean to pass legislation that would set in motion a series of steps starting with Jim's incremental but moving forward to where we end up with every American having decent health insurance to find in the future by some other body and having the delivery system be made more efficient over time.

CHAIRMAN PELLEGRINO: Mr. Capretta?

MR. CAPRETTA: I'm an amateur political philosopher. I don't do this kind of stuff for a living. I really am more into the programs and policies and how they work and so on. So I come into this with a little trepidation.

But I guess what I observe is that we're struggling with how to make the current system more just in a practical way that can actually pass our legislative process. And it's not that the current situation is totally unjust. There are injustices that occur. It's disorganized in too many ways. People do fall through the cracks. It doesn't work optimally, that is for sure.

But I think we lose sight of the fact that we've enacted large amounts of programs aimed at trying to give access to care to people. I mean, we have a Medicaid program. We have an SCHIP program. We have community health centers. We have large amounts of public subsidies that go to hospitals. We have a lot of things, all of it, perhaps, inefficient, disorganized, not well run.

But it's not like our society has been indifferent to this and not tried to do some things. It's just not in a systematic way that I think a lot of people would like to see. So our efforts here are starting with a very mature system, even as bad as it is in some sense, and our effort is to try to make it more just, not start from scratch and create a whole new system.

CHAIRMAN PELLEGRINO: Dr. Lawler.

PROF. LAWLER: That was a fine statement, but from a purely ethical point of view, which is not available to me, necessarily. Dr. Woolhandler seemed to have this ethical theory that when it comes to medical care there should be no exchange of money. So co-pays are immoral. Deductibles are immoral.

Whereas your other two, to some extent or another, think actually to introduce a bit of cash here is helpful because understanding yourself as a consumer makes the person delivering the product more responsive and introduces choice.

So if I wanted to go to the doctor and the doctor recommends a test right now to me that's for a disease that I really, really probably don't have, but just in case, because I have somewhat decent insurance now, I could get it for free, and I would say, "What the heck? I like tests."

But if that test would cost me, say, $500, I would say, "Let's talk." But if I were a really poor guy, which I'm not, I might say, "No tests. I can't afford it." If I were a Silicon Valley guy I might say, "Give me 20 because I like tests."

So doesn't this introduce a certain unjust inequality into the system? That's not actually my view, necessarily, but it's a question on the level of ethics we have to consider.

CHAIRMAN PELLEGRINO: Sorry, my peripheral vision didn't pick you up.

DR. WOOLHANDLER: I mean, I work in an institution where we see some Harvard professors and students, but we see an awful lot of poor people, and I have indeed had patients die because they had a heart attack and stayed at home for two days seeing if the pain would go away and then showed up too late to get the clot-buster drugs that would save their life. I'm talking about a 47-year-old man, father of three, employed as a truck driver.

So I've seen people die because of co-payments and deductibles. But this is not just anecdotes. Co-payments and deductibles were studied in the Rand experiment. They've been studied a couple of times in Canada where they've introduced small co-payments and deductibles, and they always have the same effect.

Rich people are not affected by them a bit. Low-income people get less care. They get less elective unnecessary care. They also get less life-saving and completely necessary care, and that's the basis on which I think they're immoral.

CHAIRMAN PELLEGRINO: Dr. Dresser, did you want —

DR. NICHOLS: I just wanted to say — as this country economist I have to say that it can be immoral. It does not have to be. And when I go back to my vision of the community and the justice therein, an obligation for leadership is stewardship. We have to have stewardship.

This can be a tool of stewardship if it's done wisely. Wise would be free for the poor and very low for the near poor. But for you and me, frankly, it ought to be nontrivial so that we can help make the stewardship decisions that make the system better.

MR. CAPRETTA: I'll just add to that, it's imperfect, but our laws do reflect the sentiment that you're mentioning, which is that in the Medicaid program cost-sharing and deductibles are very, very low. We just enacted a new drug benefit. It is essentially free for everybody below 135 percent of poverty, and then they start phasing in some cost-sharing and premiums for people above that.

It still may be pinching for some low-income seniors, but the sentiment of trying to do what can be done to make it near free for those who are the neediest is pervasive in our political culture, and people are trying to do that. It's just a matter of practicality: How do you do it better? How do you make it more just?

CHAIRMAN PELLEGRINO: I apologize to the panel for not being able to see their body language. It's like conducting when all the cellos are in a row. Professor Dresser.

PROF. DRESSER: Thank you. I have a question for Dr. Woolhandler and for Mr. Capretta. For Dr. Woolhandler, I'm probably mangling this philosophically, but I think Kant said, "Ought implies can." And so, you know, I love your idea, and if I were queen of the world or the US I would say, "Okay. Go for it."

But I just wonder, if it's not realistic in this country, then it's a placebo. So how do you think we're going to get from here to where you are politically?

And then, Mr. Capretta, could you talk more about this consumer model of health care? I don't think that ordinary people can be very good consumers about health care. On the margins, yeah, but deciding, "Well, do I want a plan that covers, I don't know, any kind of care that most people would think was necessary," I would not — I guess talk about how you think people can make informed decisions like that.

DR. WOOLHANDLER: Well, I think the argument you're making is politics is the art of the possible. But I actually disagree with that. I actually think politics is the art of creating the possible, and what's possible is what people believe is possible.

So who would have believed before Rosa Parks that we would have a civil rights movement and a Civil Rights Act? Who would have believed in the mid-1980s that the Soviet Union was about to collapse?

So you can't just sit here and say based on what you're seeing today that no change is possible. We've got to create the possible, which I think is a challenge to this group and, you know, partly why I reacted so strongly to the suggestion you couldn't understand it or come to grips with it.

You have tremendous moral suasion. You have the power as a group to make a statement that universal health care is the only ethical policy alternative and that the only proven way to get universal health care is through nonprofit national health insurance.

If you went public with that, you would be creating the possible. You know, you would be creating the possible and helping people believe that this real change is possible. And when I look at those polls about the American people, the American people say they want national health insurance.

It's not that the people don't agree. It's the insurance industry that's blocked this from debate. They've used their full political power and economic power to block it and, frankly, the pharmaceutical industry, as well. And they've always opposed this.

And when I first got in this business I was shocked about the pharmaceutical industry opposing it. Well, it turns out they knew something that the American people just learned later, which is every nation with national health insurance negotiates for price discounts on drugs. They knew that, and they were completely and totally opposed to any sort of national health insurance covering drugs because they were going to get lower prices.

So we've got the American people endorsing it. We've got some very powerful folks opposing it. We need to get it on the agenda, and the one real power you have and you can use it, or you can turn your back and say, "We don't understand this." You can use that power to put this on the political agenda.

CHAIRMAN PELLEGRINO: Thank you. Mr. Capretta?

MR. CAPRETTA: I think your question on consumerism is an excellent one. We are nowhere near a system where that's going to operate easily. I would commend you. Secretary Leavitt, actually, is talking about — he uses different language, but he calls it a value-driven health care system, where a couple of things would have to happen.

One is there would have to be a lot more clear price transparency at the provider level, hospitals and physicians and clinics and labs, on a more uniform basis, so people could start making comparisons, and not just individual consumers but their intermediaries.

That is, you know, there could be a marketplace where consumers are picking between bundled services so they don't have to decide each individual care decision, but they're deciding, "I'd rather get my care through this network for this fee, and they're going to provide this package of benefits when I need it."

And that becomes a little bit easier for consumers to look between plans because some will have more controls on it and some won't. But it should be provider-driven, provider-organized with the information on individual services more transparent. I don't know if that helps.

PROF. DRESSER: Well, I just think maybe when somebody is in great health and they have a month to set aside to read about all these things they can think about these, but if you're a patient choosing what hospital you're going to go to and you really need to go in the hospital, you can't research it.

And the other thing is, okay, so people make trade-offs, and they say, "I want B plan instead of A plan," and they have an illness where they need A plan. So then we're going to say, "Well, sorry, you only have B plan. So therefore you go into bankruptcy or you don't get the care."

MR. CAPRETTA: Yeah. I think most of the decisions should be made well in advance of actually needing care so people are buying into systems of care that they hopefully stay with over a number of years.

I think it should be more about not coverage but sort of the mechanisms through which they access services. Do they want to have a very wide access network of physicians and hospitals, or are they okay with one which is a little bit more controlled: "I'm going to have to go to this set of doctors and this hospital and this lab if I need this service."

And I think those are the kinds of trade-offs consumers can make more so than, you know, "My plan doesn't cover x procedure, and I really need it. How am I going to get it now?" I think those get to be more problematic. Like everything else we've been saying, I'm not sure we have to get to those kinds of questions, though, in the immediate future. I think there's so much that can be done on just the disorganized system and making it better.

CHAIRMAN PELLEGRINO: Dr. Meilaender?

PROF. MEILAENDER: Well, I'm as always very frustrated with this topic. I want to make a couple of points. Peter, I don't understand your notion of what ethics requires. Equal treatment is not necessarily the same as identical treatment. Very few people have ever thought that those were to be equated. And so treating people equally doesn't necessarily mean that they all have to get exactly the same sort of care.

And that brings me around, Alfonso, to wondering about what you mean we owe to each other in justice. If we owe universal care to each other, what does that mean? All the care that's available? All the care that anybody can get? Some minimal level of care? Catastrophic coverage? It means almost nothing to say that we owe universal health care in justice to each other unless you can say something about what that involves.

And my main concern about that is not whether it's possible — I mean, there may be questions about whether it's possible — but what's desirable. I do not like the consumer language with respect to health care, partly for reasons that Rebecca raised, but partly for some other reasons.

I mean, I don't think of dealing with the body as dealing with a commodity, precisely. I do think that vulnerable people are not in a good position to make these decisions. I can hardly figure out the explanation of benefit forms that my insurer sends to me.

Consumers don't really share risk in the way that fellow insured people do. So, I mean, I don't like that consumer language very much at all. But I can see how one might be driven to it, Dr. Woolhandler, when you tell me that no one in his right mind would take a certain treatment.

But that's a very old way of talking that a lot of patients reacted against. Though I'm hardly the strongest proponent of autonomy, I react against, as well. You know, what people in their right minds will do is a pretty complicated question, and what constitutes a right mind?

And we're driven to consumer language over against an oppressive medical system that thinks it has all the answers. So I'm not very happy with some of the arguments for universal care unless they can really be clarified in ways that they're not clear to me right now. I'm not very happy with the consumer language as an alternative model. And that leaves me kind of stuck, really, and unsure.

CHAIRMAN PELLEGRINO: Dr. Carson?

DR. CARSON: Well, first of all, before the afternoon is expended, I just want to thank all three panelists because it's been very enlightening, and you have obviously put a lot of thought into this, and it's much appreciated.

You know, the program that Congress has for their health is frequently touted as something that's quite superior. And every time a congressman or senator wants to curry favor they say, "Well, I wish you had the program that we had."

So, first of all, what is the program that they have? And then secondly, you know, looking at what we spend already, twice as much as anybody else, is it enough for everybody to have the program that they have? Too much? Too little?

DR. NICHOLS: Well, Jim and I both lived in it, so I guess we can both talk about it. I'm sure he'll have stuff to add. But, briefly, when, for example, senators say, "I'd like for the American people" — and it gets to your point, sir, about "I'd like the American people to have what I have."

Typically they're thinking about in their mind the Blue Cross/Blue Shield standard option, PPO, the, if you will, proverbial modal policy in the United States right now. And it's the number one choice, I think, still in the federal system. But the federal system is built upon the notion of choice.

So the Office of Personnel Management runs something like a connector or an exchange, and it says, "If you want to sell to federal workers, here are some conditions." They do not specify a specific benefit package. They do negotiate to make sure the actuarial value difference is relatively small, i.e., manageable and not likely to provoke much adverse selection. And they allow choice based upon what plans are willing to offer in different parts of the country.

So in northern Virginia you might have 12 offerings, and in Idaho you might have three. In California you might have 20. So it really does depend upon the local area. And there's a formula by which the federal contribution, the employer contribution the federal government makes, is calculated, which is based upon enrollment and stuff, but basically it's like a fixed dollar amount accepted.

It varies a little bit by how people vote with their feet, but then the employee has to pay a share. So the point is, very expensive plans will cost the employee more. And so there's some incentive built in, gentle, but some incentive built in to select plans that deliver care in some sense more efficiently.

So it is a model of choice. If we just opened the gates and said all Americans could come in and somehow we, I don't know, find oil somewhere and finance it that way, the advantage would be we could probably sign everybody up within a year because electronic portals exist and all that stuff and insurers are already everywhere, so they could handle it.

But it wouldn't do anything to change the delivery system. It is a financing system to pool risk. It is not a system trying to drive care. If you look at health care cost growth over time within the federal system versus the other employers in the nation, basically it's like a snake. Over 20 years they're the same, which is not shocking, because they're buying from the same health care system. So it's not a device for controlling costs.

CHAIRMAN PELLEGRINO: Dr. Gómez-Lobo, would you like to respond to Dr. Meilaender 's comment?

PROF. GÓMEZ-LOBO: Yes, very briefly. Of course, I'm aware that concepts of justice need to be expanded and further developed. I think what I was trying to do was what Dr. Woolhandler pointed to, namely, this idea of making things possible.

What I had in mind was this, that, say, ten years ago most of my European friends of course took it for granted that everyone should be covered by health insurance. But many Americans did not think that way. In fact, I know many people who still are not convinced that everyone should be covered. They believe that people should go their own way, et cetera. So my point was really minimalistic. It was let's put up front there as an ethical imperative the goal of having everyone covered under some kind of insurance that gives them access to health care.

CHAIRMAN PELLEGRINO: Dr. Lawler, would you like to respond and anything else you want to add?

PROF. LAWLER: Well, let me try to figure out why everything is unsatisfactory to me, and let's just forget about the uninsured right now. Most Americans, for a couple of generations, have been covered by employer-based insurance where they haven't had to give much thought to the details of it.

Now, this is bad in many ways we've gone over, and it's not appropriate for the emerging more individualistic no-loyalty-based economy. So it's toast. A lot of intermediary stuff is toast, like unions, public and private pensions, yadda, yadda, yadda. It's all gone.

And so we have two possibilities, both of which seem bad. One is to give it to the government, and it could use it in an unjust and tyrannical way, as Bill pointed out. The other is to push all the way back to the individual. The individual will be kind of overwhelmed with choice, a choice individuals, in fact, aren't well suited to make in many cases, and it seems cruel or reductionistic to refer to the person who needs health care as a consumer.

So we have — because this intermediary thing is broken down due to the character of our economy, it seems like all of the schemes are undesirable. But, nonetheless, there was something good about the old time. The insurance was provided by an intermediary association. It didn't push it all back on the individual. On the other hand, it didn't put it in the hands of the providers.

And so in a certain way that's not exactly a crisis, but it's a very new situation. So I agree. I don't think the government should be able to tell me that this procedure is ineffective and I can't get it, even if I'm a millionaire and use my own money. There's something really tyrannical about that.

On the other hand, too much medical choice repulses me. A friend of mine was talking about over lunch he has early stage prostate cancer. So what he secretly wanted was to go to the doctor and the doctor just tell him, "Well, we're going to do this, and you'll be okay." But, no, he gave him ten different treatment options with cost and benefits, and it really was complicated medical trade-offs. He would have been thrilled to have been relieved of the burden of that choice.

I'll give you another example. It's not medicine, but we used to have pensions. I've heard rumors about them, but now we have TIAA and you have to save your own money. And then we have to put it in various funds, so we have to become experts in the stock market.

So I don't want to be doing that. I tell you the truth even though it shows I'm pathetic, as an individual I'd rather have these things decided by some competent authority and have the money when I retire.

So in general, America is becoming more individualistic, and there are a lot of good things about that. I'm basically a free market guy. But in the area of health care it puts us in two undesirable extremes. You can think of people as consumers or in a way that money should have nothing to do with this at all as if I had no responsibility for it at all. I don't agree with that opinion. I just put that opinion out there to see what you guys would say.

DR. WOOLHANDLER: I just want to go first. In terms of something that, quote, no one in their right mind would get, you've sort of inverted the meaning, or maybe I was unclear of my meaning.

I think the reason people go for things that don't make sense — and by that I mean things that are actively harmful — is because the medical establishment pushes it on them. And I can sit here all day and give you clinical examples.

We were talking about some in the ladies room, EPO that was supposed to raise your blood count if you were in kidney failure or getting cancer treatment, only the doctors were paid more to give you higher doses. So they gave people so much EPO that they raised their death rates by 30 percent.

So I don't think someone should have — that isn't a consumer decision that I want to give someone — you know, "Here, take this EPO and raise your death rate." But it wasn't a consumer decision. The doctors were pushing it onto the patients because they were making money off of it.

Similarly, we never had good evidence that stent placement for stable coronary disease worked, but it was a 20-billion-dollar-a-year industry, not because the people, the patients had autonomy and were demanding it, but the doctors were recommending it because the doctors and hospitals were making lots of money doing it.

And finally now there's evidence that it's absolutely not needed and it may, in fact, be harmful. But let's see how fast the doctors and hospitals stop doing it. I don't see them stopping it. They're coming up with new excuses and new ways of doing it that are still yet unproven.

So the point I would make is that the standard for coverage is — if it's effective it's covered. If it's known to be ineffective, we should discourage it, whether people are willing to pay or not. And we still may have a gray area, and then that's where you put it before the patient with ten choices or whatever. But we need to try to shrink that gray area and cover everything that works.

MR. CAPRETTA: Just on the question of complexity and choice, you know, they started the Medicare drug benefit in 2006, and it was kind of rolled out with a lot of stories about too many choices and suddenly seniors were faced with 50 different options in some places, and there were lots and lots of available different ways of getting your drugs, et cetera.

And it sort of sorted itself out, though. I mean, like these things generally do, there were information campaigns to help people. Then the ones that were big and credible kind of got the most enrollment. And more or less it sorted itself out pretty rationally.

Now, that was just pharmaceuticals, so that's a narrow part of the medical system. But to the extent that people are given choice in advance of needing care — and there are lots of intermediaries trying to help them sort through it, which there were — you know, it can work.

DR. NICHOLS: If I could add, not only was that choice seemingly overwhelming, but I think the satisfaction poll is in the mid-eighties now. I mean, people sort of like what's going on. They're getting drugs and help to pay for it. That's a good thing from their point of view.

But I also want to just caution you, please, it's not just a choice between extremes here. I exist, and I'm just a metaphor for what's there in Washington to talk about different ways of trying to meld these different schemes.

And I would submit the point of the new market is to create and hold onto what was good about the employer system. You've got the risk pool, and you've got the economies of scale. You've got, if you will, managed choice. There's not going to be 150 options because once you set those rules in place, the little bitty insurers will quit. They'll sell their book of business that night, and the big guys will do this, and we'll have seven to 20. And that's all we need.

CHAIRMAN PELLEGRINO: Dr. Hurlbut?

DR. ROWLEY: Can I just respond? Yes, because you only have to go a couple of blocks south of here and you see Blue Cross/Blue Shield, which is one of the buildings right on the park. It's now expanding. It was, I don't know, 25 stories, and it's going to go up to some other number.

And Stephanie 's picture of the two tall buildings in Boston — these building are not being built on speculation. They're built on profits that the health insurance companies are making. And if we could have a system where all of the health care was nonprofit, then it would go a long way to covering the costs of the uninsured.

And I would agree that the insurers have a vested interest in seeing that the present system is maintained. And when one health insurer buys out another one, the CEO gets some enormous millions and millions and millions of dollars of compensation. And I think that's all borne by not only us, who have the insurance, but also by the lack of care for others. And I think it's unconscionable.

DR. HURLBUT: I'd like to know about these publicly traded companies making these huge profits so I can do better investing. Maybe instead of all this we should just have the federal government invest in these companies to make these do profit — well, I'm just kidding.

But, you know, here's the question that comes down: Carl said earlier that we didn't have the expertise to adjudicate and weigh all these properly, and Dr. Woolhandler said, "No, there's a lot of IQ points in this room." There's a lot of IQ in the panel, and you guys don't agree, right? That's my first question. And you are more or less waiting on us to come out for universal single-payer coverage. I mean, that's what you were hoping we would do. I think you said that, is that right?

DR. WOOLHANDLER: I'm sorry. You're actually asking me why I don't agree with my fellow panelists?

DR. HURLBUT: So what I really want to say is that I — apart from the truth of what he said, I think our Council would have a special calling towards certain moral dimensions of this, not — you guys have spent your lives on this. This is hard stuff. We come with different perspectives.

What I'd like to understand is specifically what do you think our Council can contribute to this? Did I understand you earlier implying that you were sort of hoping we could come out and endorse your plan?

DR. WOOLHANDLER: I believe that the moral choice at this point in history is nonprofit national health insurance. I believe that there's no other method ever used by any nation on Earth to achieve universal health care, ever, that other methods have been tried in the United States, in several state experiments, and it failed repeatedly. So the only proven way to achieve universal health care in the planet Earth happens to be nonprofit national health insurance.

I would expect that this group would have the courage to endorse the idea of government-guaranteed universal health care. I would hope that you would say nonprofit. To be honest, I think you will. I don't really know. That would be a leap for you to take a position that was that opposed to the business interest of the insurance industry and pharmaceutical industry. But you're not an economics panel. You're an ethics panel. People look to you for moral leadership, and political decisions are moral decisions. And I think you need to decide what you think is moral and say that.

And Lord knows, if McCain is the next president, you may be losing your jobs if you do this. You may not be reappointed to this if McCain is the next president and you say, "We endorse universal national health insurance. We endorse nonprofit universal national health insurance."

PROF. LAWLER: But Obama is sure to keep us.

DR. WOOLHANDLER: I have no idea. But, you know, the question is what you think is the moral choice right now, and I actually think saying, "We can't figure it out" — that's a total cop out, and you can say you don't agree with it, that "We don't agree with universal health care," or you can say, "We want universal health care, and we're going to pretend that someone has figured out a way to get there without nonprofit national health insurance" or "We're going to invent something that no one on the planet Earth has ever done before to get to universal health care."

But if you're going to say, "We're going to try something proven," you're going to have to say nonprofit. It doesn't have to be Canada, but it's going to have to be one of the nonprofit national health insurance models used by every other developed country to get to universal health care.

DR. NICHOLS: I said before, and I still maintain quite a bit of respect for Stephanie 's interpretation of data and history. But I will point out the Netherlands and Switzerland both have universal coverage, and they have competition among nonprofit insurers. They are nonprofit insurers, but they do have competition. Could I just finish the point?

DR. WOOLHANDLER: Yeah, but I want to talk a little bit about that.

DR. NICHOLS: Okay, fine. But I'm just saying there are examples where insurance is actually multiple payers and they manage to get everybody covered and they have individual mandate, by the way. So it's not like it's absolutely only in a dream.

But I will say that in my view the moral issue that you have to weigh is the balance among all these competing objectives. And that's why I submit while Stephanie 's system would satisfy a number of objectives, in my view, something more like the bipartisan approach I'm talking about is much more likely to balance everything, and that's why I come back to reasonable cost-sharing, good subsidies, market rules, and delivery system.

CHAIRMAN PELLEGRINO: Gil, I thought you looked like you wanted to ask something.

PROF. MEILAENDER: I just wanted to ask —

CHAIRMAN PELLEGRINO: Oh, you haven't finished, Bill. I'm sorry.

DR. WOOLHANDLER: Can I just point out that both Holland and Switzerland got to universal health care by a nonprofit national health insurance mechanism. They did. Now, within the last two years both of them have allowed private insurance firms to become involved, but that's not how historically —

DR. Nichols: But they are the system now.

DR. WOOLHANDLER: That's not how they got there. That's something very recent. We don't even know the results of it. Again, maybe if you're already at universal health care you can reintroduce for-profits that may pan out. But no one has gone from a system where you had uninsured people to universal health care using a for-profit model.

DR. HURLBUT: I'm still struggling with what our Council can reasonably do on this issue. And it strikes me one of you — I think it was Dr. Nichols — mentioned that the American health care system carries a little more baggage than some others that it's often compared to. And by that you included higher levels of trauma.

But also, I think, implicitly, at least some positive things — I mean, I don't know this to be an absolute fact, but my impression is that the United States health care system pushes the boundaries of care in special ways with a lot of technology.

And I'm at Stanford Medical School. We certainly do a lot of interesting things there that move medicine along. I'd like to hear — let me rephrase that. I sense what each of you are saying to us, there's some agreement on principles. There's quite a lot of disagreement of boundaries of prudential decision, what's going to work the best, real political views.

But there seems to me also some differences in implicit moral assumptions and also expectations of what a health care system should be. I mean, for example, if I turn to my colleague, Alfonso, with whom I have a great deal of agreement on many issues and I asked him, "Well, you said it was simply a matter of justice," I would put back to you would that include the right of health care coverage under Stephanie's plan, which would have no other medical providers? So would that include abortion?

Now, that's an issue of what a plan is going to include. I don't mean just simply what level but a whole category. Now, this strikes me as a moral issue as well as a very big practical issue. I'm not trying to cloud the waters here, although, let's face it, abortion is — I guess it's the most common surgical procedure in the United States, one every 30 seconds or so.

DR. SCHNEIDER: I think cataracts are more —

DR. HURLBUT: Cataracts. Okay. But I'm just searching, grasping for something that our Council can address in this without having to claim to be authorities over something that you three can't completely agree on and is obviously very difficult.

Maybe we could affirm the things that you all do agree on. That might be possible. But what are the special categories of moral concern that we are searching for as our special contribution to this.

And just one more thing I want to point out. I'm picking on you, Stephanie, but you made several statements that seem to me to carry moral assumptions. You said, for example, that the rich would have to have the sort of moral courage to give up the high-level special care that could be provided by complimentary private offerings, right? Just say "right."

DR. WOOLHANDLER: I don't actually think that's correct.

DR. HURLBUT: You said you didn't want anything like the UK where there was a parallel provider system.

DR. WOOLHANDLER: But everything effective needs to be available. Everything effective needs to be free. And I don't actually think that the quality of care is better at private hospitals in Great Britain than in the National Health Service hospitals. It's more luxurious. But if Ms. Thatcher, when she had her gallbladder out, had gotten a complication, they would have put her in an ambulance and shipped her to the National Health Service hospital since those are the — tertiary care, top quality hospitals are actually NHS hospitals.

The private hospitals in Britain are the, quote, nursing homes, although they're really a hospital. You know, they're luxurious. The food is better. The room is private. It's quieter. But it's not better care.

And I don't expect anybody to give up the quality of life-saving care — the actual quality of care. What I do say is that people need to accept that they may be lying in the bed next to a janitor, okay? And that's what's true in American top tertiary care centers. Probably at Stanford Medical Center you've got a CEO in the ICU next to a janitor. We're not asking for anything more than that.

DR. HURLBUT: This does not comport with what I understand of medical reality. When somebody in my family gets sick, I seek out the person with the best reputation and one I feel like I can really trust. You know, if I want Dr. Carson to do my brain surgery that's because I trust him, I know him, and I think he's going to be better than the guy down the street.

If medical care were all even, then it seems to me what you're saying would be true. But it just strikes me that that's not the way things actually are in the real world.

DR. WOOLHANDLER: Let me just clarify something. In a national health insurance system, the patient has complete free choice. They can go to any doctor or hospital they want. So you could still travel to Dr. Carson to get brain surgery for your child, I guess you're assuming.

And people do that in Canada. They go around and look for the best surgeon. So there is in some level free choice in terms of doctors and hospitals. You just can't choose one insurance plan or another. Everyone has the same insurance, but once you've got it you've got much more choice than anyone has in this country because you can go to any doctor or hospital you want.

DR. HURLBUT: Just, finally, can you tell me what your system would lose? I mean, there must be something good we would also lose in the process. Maybe each of you can tell us what that is. And, more specifically, can you tell us what you think our Council should do?

DR. WOOLHANDLER: I think I've said what I think the Council should do. I think you need to take a moral stand and support universal care and a nonprofit national health insurance system.

You know, I actually think the thing you lose is there is a certain politicization to medical decision-making. Now, we have that already in the Medicare program. And one of the things Jim said which I really agree with is Medicare is the main lever that's used now to shape how health care is delivered.

And you're actually expanding that lever in some ways by going to a single-payer system. And Medicare has made a lot of mistakes. It covers a lot of stuff it shouldn't cover. It wastes a lot of money it shouldn't waste. So that's an issue.

And a lot of silly stuff ends up going through Congress about coverage decisions, and we're just going to have to deal with that through the political process.

But I sincerely think — you know, there's 301,000,000 American people that probably 300,000,000 of us would be better off with a national health insurance system. There's probably a million people who own insurance companies and drug companies and might find themselves worse off.

DR. HURLBUT: What would you do with an issue like abortion, for example?

DR. WOOLHANDLER: I think the issue of abortion has to be decided by a group of experts and community members. It's a very highly charged issue. And there's not going to be something in a national health insurance law that specifies every procedure. It's going to specify a process about how these decisions should be made. And what they do in Canada is they have a panel that has medical experts and also has community members, and they make these decisions.

CHAIRMAN PELLEGRINO: Dr. Meilaender, I think you have the last word. Forgive me, I can't see out of the side of my — go ahead, Doctor.

DR. NICHOLS: Well, I was just going to offer, if I could, I think it would be ideal if the Council would endorse the concept of justice that says every American ought to have access to health care and we think health insurance is probably essential to make that happen and the system ought to become more efficient and however else you want to say that.

I think you should be indifferent, frankly. I think you shouldn't be discouraged by the fact we disagree. We're selected because we come from particular points of view. So that's normal.

On the specifics of who would win and who would lose if my vision or something like it came into being, I think it's unambiguously true the losers would be the proceduralists who are doing surgery and some diagnostics that have what I will call a shorter trigger than their colleagues, the ones who do way more than is sort of normal for given population indications.

The overutilizers are largely driven by provider self-interest, and they would lose. I think it's true we could figure out a way to pay people to orient their behavior in a better way, but some of those high-end proceduralists are going to lose, and therefore some of the device companies which are less inclined to compete on a scientific basis and more inclined to use marketing would end up losing because the evidence base would grow over time and it would be harder for those who didn't have true scientific value to be enhanced.

The flip of that is the people who would win are precisely those you want to win, and they would be the primary care and coordinating care medicalists who can help us all get healthier in a more efficient way and the device companies and the drug companies.

The difference in me and Stephanie is I have no problem with people making money as long as what they're doing is adding clinical value and improving our health. I want to change the incentives to make that happen and change the rule, and that's really what it's all about.

MR. CAPRETTA: In some sense I was hoping not to answer this question, but what should the Council do? You know, I guess my sense is that the political process has — I think as Dr. Lawler said this morning, there's widespread agreement that they'd like to make the medical system, the health care system better, you know, for everybody, more just in a certain sense, as I was trying to say earlier, better than it is now.

I don't think it's so much a question of admonishing people that they're not doing the right thing. I think a lot of it has to do with how to do it and, you know, taking steps that are practical and consensus-building. You know, that's just my own judgment, having observed this. So I'm not sure that's enough direction for you or not.

But regarding what we would lose, I do think that we should probably think about health care reform not as a point-in-time once-and-for-all decision but as, you know, we're going to be working at this probably for 25 years, and so we should be trying to set ourselves up for further success.

What are the things we can set in motion that can be built upon, that can be adapted, that can change with new medical discovery, that can change with science? And I'm worried that we will set up a system that will become less flexible and less responsive to new opportunities than we otherwise would. So that would be the one thing I would worry about losing.

CHAIRMAN PELLEGRINO: If I haven't missed anyone on my periscope — Dr. Meilaender, you have the last — okay. Thank you very, very much, members of the panel, members of the Council, exploring a very difficult issue in detail. Thank you.