1. Variation: How It Manifests, What to Do About It Carolyn M. Clancy, MD Director Agency for Healthcare Research and Quality AHA Task Force on Variation in Health Care Spending Meeting Washington, DC – November 10, 2009

2. A Major Public Policy Issue A Major Public Policy Issue Variation in Care Delivery and Spending Variation in Care Delivery and Spending Comparative Effectiveness Research: Can It Help? Comparative Effectiveness Research: Can It Help? Variation: How It Manifests, What to Do About It

3. The Status Quo Is Not Acceptable

4. Not Just for Policy Wonks Up to 30 percent of health care spending goes toward useless treatments that we dont need Up to 30 percent of health care spending goes toward useless treatments that we dont need Overtreatment costs the U.S. system $700 billion a year Overtreatment costs the U.S. system $700 billion a year Unnecessary treatment and tests arent just expensive; they also can harm patients. Unnecessary treatment and tests arent just expensive; they also can harm patients.

5. The Public Is Paying Attention! June 1 article became required reading in the White House June 1 article became required reading in the White House McAllen, TX, is the second most expensive health care market in the USA: why? McAllen, TX, is the second most expensive health care market in the USA: why? Medicare spending half of that of El Paso, TX, despite similar community profiles Medicare spending half of that of El Paso, TX, despite similar community profiles

6. Health Care Spending Per Capita Source: Congressional Research Service. Washington, DC. Pub No. RL34175 Based on 2003 data from the Organisation for Economic Co-operation and Development (OECD)

7. Pharmaceutical Spending Per Capita Source: Congressional Research Service. Washington, DC. Pub No. RL34175 Based on OECD data 2006

8. Global Trends in Health Expenditures From: http:// www.oecd.org/document/16/0,3343,en_2649_34631_2085200_1_1_1_1,00.html

9. Per Capita Medicare Spending: Regional Variations From: Congressional Budget Office. Research on Comparative Effectiveness of Medical Treatments. 2008

10. How Do They Do That? Lowest region in state (actual-expected) La Crosse, WI La Crosse, WI Portland, ME (one of only two HRRs in Maine) Portland, ME (one of only two HRRs in Maine) Asheville, NC Asheville, NC Actual cost < expected Temple, TX (second lowest after Lubbock) Temple, TX (second lowest after Lubbock) Everett, WA (second lowest after Spokane) Everett, WA (second lowest after Spokane) Four are problematic Richmond, VA (highest actual-expected in state) Richmond, VA (highest actual-expected in state) Sacramento, CA (actual > expected) Sacramento, CA (actual > expected) Cedar Rapids, IA (actual > expected, but in a low-cost state) Cedar Rapids, IA (actual > expected, but in a low-cost state) Tallahassee, FL (actual > expected) Tallahassee, FL (actual > expected) Source: Calculations from HCUP data using Dartmouth Atlas regions http://www.ihi.org/IHI/Programs/StrategicInitiatives/HowDoTheyDoThat.htm?TabId=0 Multi-stakeholder effort examining high-performing regions

11. Variation in Employer-Sponsored Health Insurance Among the 116.1 million private sector employees in the USA, 87.7 percent worked where employer-sponsored health insurance was offered in 2008 Among the 116.1 million private sector employees in the USA, 87.7 percent worked where employer-sponsored health insurance was offered in 2008 For the 10 largest metro areas, premiums for single coverage ranged from $3,857 to $4,874 in 2008 For the 10 largest metro areas, premiums for single coverage ranged from $3,857 to $4,874 in 2008 For the 10 largest metro areas, premiums for family coverage ranged from $11,454 to $13,835 in 2008 For the 10 largest metro areas, premiums for family coverage ranged from $11,454 to $13,835 in 2008 Crimmel BL. Offer Rates, Take-Up Rates, Premiums, and Employee Contributions for Employer- Sponsored Health Insurance in the Private Sector for the 10 Largest Metropolitan Areas, 2008. MEPS Statistical Brief #261, September 2009

12. Variation in Family Premiums

13. Health Care Spending Per Capita and Life Expectancy Source: Congressional Research Service. Washington, DC. Pub No. RL34175. Based on OECD data 2006

14. Higher Prices Dont Always Mean Better Care New York Times, September 8, 2009 $ 10,000 $ 9,000 $ 8,000 $ 7,000 $ 6,000 $ 5,000 25 30354045505560657075 Medicare Spending Per Beneficiary, 2006 (according to the Dartmouth Atlas of Health Care) Overall Quality of Health Care, 2008 (measures compiled by the federal Agency for Healthcare Research and Quality LowerAverageHigher

15. AHRQs National Reports on Quality and Disparities The median annual rate of change for all quality measures was 1.4% The median annual rate of change for all quality measures was 1.4% – Of 190 measures, 132 (69%) showed some improvement Some reductions in disparities of care according to race, ethnicity, and income Some reductions in disparities of care according to race, ethnicity, and income – Inequities persist in health care quality and access

16. Geographic variation in practice patterns Geographic variation in practice patterns – Poor relationship between costs and outcomes – Need to establish best practices Cost containment Cost containment – Recognition of limited resources System management System management – Improved management, accountability The Outcomes Movement A. Epstein, NEJM 1990

17. Comparative Effectiveness and the Recovery Act The American Recovery and Reinvestment Act of 2009 includes $1.1 billion for comparative effectiveness research: The American Recovery and Reinvestment Act of 2009 includes $1.1 billion for comparative effectiveness research: – AHRQ: $300 million – NIH: $400 million (appropriated to AHRQ and transferred to NIH) – Office of the Secretary: $400 million (allocated at the Secretarys discretion) Federal Coordinating Council appointed to coordinate comparative effectiveness research across the federal government

18. AHRQs Priority Conditions for the Effective Health Care Program Arthritis and non- traumatic joint disorders Arthritis and non- traumatic joint disorders Cancer Cancer Cardiovascular disease, including stroke and hypertension Cardiovascular disease, including stroke and hypertension Dementia, including Alzheimer Disease Dementia, including Alzheimer Disease Depression and other mental health disorders Depression and other mental health disorders Developmental delays, attention-deficit hyperactivity disorder and autism Developmental delays, attention-deficit hyperactivity disorder and autism Diabetes Mellitus Diabetes Mellitus Functional limitations and disability Functional limitations and disability Infectious diseases including HIV/AIDS Infectious diseases including HIV/AIDS Obesity Obesity Peptic ulcer disease and dyspepsia Peptic ulcer disease and dyspepsia Pregnancy including pre-term birth Pregnancy including pre-term birth Pulmonary disease/Asthma Pulmonary disease/Asthma Substance abuse Substance abuse

19. IOMs 100 Priority Topics Topics in 4 quartiles; groups of 25. Topics in 4 quartiles; groups of 25. First quartile is highest priority. Included in first quartile: First quartile is highest priority. Included in first quartile: – Compare the effectiveness of screening, prophylaxis and treatment interventions for eradicating MRSA – Compare the effectiveness of strategies for reducing HAIs – Compare the effectiveness of genetic and biomarker testing and usual care in preventing and treating clinical conditions for which biomarkers exist Initial National Priorities for Comparative Effectiveness Research http://www.iom.edu

20. Office of the Secretarys Spend Plan for Recovery Act CER Funding Designed to complement AHRQ and NIH activities Designed to complement AHRQ and NIH activities – Data Infrastructure: Identify unique high-level opportunities to build the foundation for sustainable CER infrastructure to fundamentally change the landscape – Dissemination, Translation and Implementation: Innovative strategies that go beyond evidence generation and lead to improved health outcomes – Priority Populations and Interventions: Coordination of efforts across multiple activities to include subgroups that traditionally have been under-represented in research activity

21. Specific Investments (Examples) Data Infrastructure Data Infrastructure – Enhance Availability and Use of Medicare Data to Support Comparative Effectiveness Research – Distributed Data Research Networks, Including Linking Data Dissemination and Translation Dissemination and Translation – Dissemination of CER to Physicians, Providers, Patients and Consumers Through Multiple Vehicles – Accelerating Dissemination and Adoption of CER by Delivery Systems Research Research – Optimizing the Impact of Comparative Effectiveness Research Findings through Behavioral Economic RCT Experiments – Comparative Effectiveness Research on Delivery Systems

22. AHRQ Spend Plan for Recovery Acts CER Funding Stakeholder Input and Involvement: To occur throughout the program Stakeholder Input and Involvement: To occur throughout the program Horizon Scanning: Identifying promising interventions Horizon Scanning: Identifying promising interventions Evidence Synthesis: Review of current research Evidence Synthesis: Review of current research Evidence Generation: New research with a focus on under-represented populations Evidence Generation: New research with a focus on under-represented populations Research Training and Career Development: Support for training, research and careers Research Training and Career Development: Support for training, research and careers The Right Treatment for the Right Patient at the Right Time

23. Translating the Science into Real-World Applications Examples of Recovery Act Evidence Generation projects: Examples of Recovery Act Evidence Generation projects: – Clinical and Health Outcomes Initiative in Comparative Effectiveness (CHOICE): First coordinated national effort to establish a series of pragmatic clinical comparative effectiveness studies ($100M) – Request for Registries: Up to five awards for the creation or enhancement of national patient registries, with a primary focus on the 14 priority conditions ($48M) – DEcIDE Consortium Support: Expansion of multi-center research system and funding for distributed data network models that use clinically rich data from electronic health records ($24M)

24. Additional Proposed Investments Supporting AHRQs long-term commitment to bridging the gap between research and practice: Supporting AHRQs long-term commitment to bridging the gap between research and practice: – Dissemination and Translation Between 20 and 25 two-three-year grants ($29.5M) Between 20 and 25 two-three-year grants ($29.5M) Eisenberg Center modifications (3 years, $5M) Eisenberg Center modifications (3 years, $5M) – Citizen Forum on Effective Health Care Formally engages stakeholders in the entire Effective Health Care enterprise Formally engages stakeholders in the entire Effective Health Care enterprise A Workgroup on Comparative Effectiveness will be convened to provide formal advice and guidance ($10M) A Workgroup on Comparative Effectiveness will be convened to provide formal advice and guidance ($10M)

25. Opportunities for Hospitals CER can: Provide evidence to inform choices of drugs, devices Provide evidence to inform choices of drugs, devices Enhance potential for understanding how research can benefit diverse populations and engage communities Enhance potential for understanding how research can benefit diverse populations and engage communities Help develop infrastructure, training, registries, and non- government investment for future research Help develop infrastructure, training, registries, and non- government investment for future research

26. Thank You www.ahrq.gov www.hhs.gov/recovery