Remarks as Delivered at the American Health Lawyers Association

Good afternoon. Thanks, Melissa Markey, for that warm introduction. I think your introduction was just about the warmest thing in D.C. today.

As Deputy Secretary, I oversee huge agencies like CDC, NIH, CMS, AHRQ, and FDA. I try to make sure these agencies are not at cross purposes, and unfortunately, there’s a lot of opportunity for that. It’s like the joke about the NIH and FDA scientists talking over coffee. The NIH scientist bragged that he had just discovered a drug that would confer immortality. The FDA scientist shook his head and said that finding out if it actually works would take forever.

Seriously, though, over the past several years, President Bush and Secretary Leavitt have been working hard to enact some serious and much-needed reforms to improve health care in America. Our efforts are built on a few simple beliefs. Our government should: empower the consumer, help the needy, and allow free markets to innovate and excel wherever possible. The federal government can help by increasing competition, expanding scientific frontiers, and bringing the best minds to our most pressing problems.

I’d like to talk a little about some of the things we’ve accomplished by applying these principles. Then I’m going to talk about the direction in which we’re guiding health care into the future.

Medicare Part D: One of our most substantive reforms has been Medicare’s Part D prescription drug program. We know from every other sector of the American economy that consumers win when companies compete for their business. So in 2003, President Bush worked with Congress to create a system in which seniors can choose between companies competing to provide seniors with prescription drug coverage. The Administration decided to use the resources of the federal government to establish and fund the framework rather than to mandate decisions that consumers and companies would prefer to make for themselves. Congress defined a basic plan for seniors, but 90 percent of seniors made their own choices and chose plans that offered more options. As a result of this competition, more than 38 million Medicare beneficiaries now have some form of prescription drug coverage. Costs are down, and satisfaction is up — 86 percent of seniors tell us they’re happy with their plan. That’s staggeringly high praise for any program — government-run or not.

Stem Cells: We have also made progress in stem cell research. A decade ago, scientists discovered how to isolate stem cells harvested from human embryos. It was an amazing scientific breakthrough, but one fraught with deep moral questions.

So in 2001, President Bush drew a line. He recognized that our society needed to take moral stand so our culture did not go down a dark path that cheapened life. So he decided to fund embryonic stem cell research with ethical conditions to ensure taxpayer dollars would not encourage the destruction of embryos.

And just recently, researchers succeeded in creating genetically matched stem cells from adult cells — a process that does not go into ethical gray areas. President Bush’s courageous decision showed that while we support technological advances, we can do so in a way that reflects the highest values of our nation and our shared belief in the dignity of every life. Now we’re looking forward to seeing what advances and therapies are to come from this new discovery.

Health Savings Accounts: Health Savings Accounts are another example of how we are pressing forward to a brighter health care future. Health Savings Accounts give more citizens more choices, make health care more affordable, and strengthen the doctor-patient relationship. By removing some of the distortions in our tax code, we are helping families gain more control over their health insurance independent of where the work or what type of job they hold.

You all know how health savings accounts work. You open a tax-free savings account in conjunction with a high-deductible, low premium insurance plan. You can use the money in your HSA to pay routine medical expenses and you have the insurance in case of expensive emergencies or hospitalizations. Your employer can also contribute money to your account and help pay for your premium. But the especially attractive thing about HSAs is that even when you leave your job or begin a new year, you keep all of your unspent money — which continues to grow tax free. For 2008, an individual can contribute up to $2,900 and families can contribute up to $5,800 to pay for current medical expenses or save and invest for future medical expenses.

More than four and a half million Americans have already been helped by HSAs. As millions more start to take advantage of HSAs, they will learn how they now have more incentives to get in shape, find the best health care deals, and spend wisely. As a result, we will all feel the benefit as the rise in the costs of health care are controlled by smart consumers and less bureaucracy.

Community Health Centers: Another way to promote access for uninsured and underserved Americans is community health centers. In 2001, President Bush launched the Health Center Growth Initiative and set a goal to establish or expand health care options in 1,200 communities across the country. Since then, we have met and exceeded that goal. We have funded 1,236 new or expanded health center sites. That brings the total of comprehensive sites around America to over 4,000 — serving well over 16 million people. In doing this, we are bringing more health care options where before there were few.

More to Do: Even with this progress, we must do more. That’s why President Bush has set forth many bold ideas on many issues. And across all we do, we’re working to determine the appropriate role for the federal government and to make changes that will have a long-term impact.

Disaster Preparedness: One new challenge that has come upon HHS over the last decade is securing our homeland. We’re working to keep our communities safe from all disasters, whether manmade or natural, while encouraging families and businesses along with governments to take the initiative on emergency preparedness at home and in the workplace.

Prevent Medical Errors: We are attempting to prevent medical errors by bringing more accountability to doctors and hospitals for the services they provide. CMS, for example, will no longer reimburse for certain events that should never happen. These might include a wrong site surgery or foreign objects forgotten in the bodies of surgical patients, or even conditions that hospitals should prevent from happening, like bedsores. States and insurers are already following suit. For example, Aetna is indicating in hospital contracts up for renewal that they’re not going to pay — or even let patients be billed — for 28 never events. WellPoint is testing a similar policy in Virginia on a series of four never events. Member health plans of Blue Cross Blue Shield — which insure 100 million people — are also no longer going to be pay for never events.

Personalized Health Care: And we’re bringing about a health care system that focuses on the unique needs and challenges of each patient — a personalized health care system. I believe that personalized medicine really embodies the balance I mentioned earlier about the role of government.

When most Americans think about our health industry, they start thinking of a lot of four letter words — and they certainly can be creative. When we at HHS think about our health industry, though, we think of a few different four letter words.

• What kind of care will people get?
• What’s it going to cost?
• Will it be any good?

Unfortunately, far too often people don’t have the tools they need to answer those questions. Frequently, that information doesn’t even exist in any form useful to them. Their health care isn’t driven by value.

That’s why President Bush and Secretary Leavitt have been working to make health care more value-driven. We believe that the future of health care is personalized medicine. We believe that lumbering government agencies and one-size-fits-all schemes represent the old way of doing things. Science, medicine, and technology — in particular genomics — are opening up new frontiers to tailor healthcare to the needs of the individual.

To do this, we must build a health care system that is more information-based. We must analyze vast swaths of data to make health care more preventive, predictive, and personalized. We must deploy sensors that allow your doctors to detect the first sign of cancer and information networks that allow scientists to scan hundreds of thousands of records for a hint of a cure to a debilitating disease.

Shift in Medicine:

• External individual view
• Internal individual view
• Genomic view

Personalized medicine is when doctors, pharmacists, and other health care providers customize treatment and management plans for individual patients based on information that is readily accessible at clinics and hospital bedsides — information like medical history, genetic variability, and patient preferences. It’s when patients have more information about their choices of treatment and the implications that will follow. Not incidentally, personalized medicine could ultimately save a great deal of taxpayer and private-sector money as well.

Unfortunately, none of this will happen overnight. We can’t just snap our fingers and make it happen. But in the federal government, President Bush, Secretary Leavitt, and HHS are working to complement the work of private groups, to develop a shared vision of personalized medicine, and to bring it to fruition more quickly than it might otherwise develop. They have determined that our role as the federal government is to create a platform that allows all the elements personalized health care needs to flourish.

For example, Secretary Leavitt recently released a report detailing all of our Department’s efforts surrounding personalized medicine. The report touched on how we’re wrestling with questions about the structure of our regulatory framework and how best to enable and encourage the market for different aspects of personalized medicine. It discussed how we’re bringing together all the parts of HHS working on topics related to personalized medicine. And it showed how we’ve made a commitment to enabling consumers to choose what’s right for them — genetically, psychologically, and economically.

Some of Secretary Leavitt’s top priorities are directed at bringing this vision of personalized medicine about. The necessary foundation for personalized medicine is health information technology that enables value-driven health care. So Secretary Leavitt has established four cornerstones for value-driven health care:

• Electronic medical records,
• Standardized quality measures,
• Price transparency, and
• Incentives where everybody strives to deliver the best quality care at the most competitive price.

Over the past year, Secretary Leavitt met with consumers, employers, and providers in communities around the country, and encouraged them to commit to his cornerstones for value-driven health care. And now, as a result, plans covering 100 million Americans have signed on to adopting the four cornerstones.

Secretary Leavitt’s report also detailed how many concerned people in academic medical centers are partnering together and with us to form the vanguard of this new medicine. Academic centers are coming together to accomplish different steps that are necessary components of a successful personalized health care system. Because despite all our optimism, there is still a tremendous amount to be done to figure out genomic patterns to predict health outcomes and develop new therapies.

Here are a few examples of how we’re working with academic medical centers.

We’re encouraging research:

• NIH’s centerpiece for advancing clinical research, the Clinical Translational Science Awards Consortium, is using $100 million to bring 24 new academic centers in line for 21^st century approaches to molecular medicine and personalized health care. By 2012, when the consortium should be in full swing, we’ll be spending $500 million annually on this project. Some of the most prestigious universities are now making new efforts to link together for clinical trials and clinical research studies.
• An NIH policy change last year allows more than one principal investigator to be named to a grant. This will allow for equal sharing of credit for the work — opening the door toward new collaborations and sharing data needed for personalized health care.

We’re spurring innovation in informatics technology and bioinformatics:

• NIH and CDC are funding efforts to bring academic investigators together by sharing common platforms for enabling information exchange.
• The National Library of Medicine is playing a major role in supporting training for new approaches to health information management. For example, it’s developed various web resources to improve health literacy. These include:
  • Genetests.org, a genetics information resource for physicians, providers, and researchers.
  • GeneReviews, an expert-authored, peer-reviewed collection of current disease descriptions that apply genetic testing to the diagnosis, management, and genetic counseling of patients and families with certain inherited conditions.
  • The Genetics Home Resource, which provides consumer-friendly information on the effects of genetic variations on human health.
• The NCI Cancer Bioinformatics Grid is providing new open source I.T. tools for genomic research, and clinical trials support.

We’re helping foster partnerships among academic institutions and industry:

• In 2006, NIH, FDA, and industry groups formed the Biomarker Consortium. The Biomarker Consortium is a unique public-private partnership to help validate new biomarkers for cancer, mental health disorders, and metabolic disorders. It already has four projects underway that involve new funding models for academic investigators to work with government and industry partners to advance personalized approaches to health care.
• While Reagan-Udall Centers in FDAAA were just initiated, they will establish new opportunities for academic research to partner with FDA and industry for advancing personalized approaches to health care.

Of course, academic health centers are doing much more than working with the federal government. Over the past several years, we have seen more and more communities of personalized health care spring up all across the country — like Vanderbilt, the University of Minnesota-Minneapolis and the Mayo Clinic, Baylor and the University of Texas, the University of Utah, centers in the Delaware Valley, and many more. They’re working to leverage their assets, optimize their resources, and engage in common public health practices.

As we in the federal government continue to develop and implement personalized health care initiatives, I want to assure you that we want your expertise and insights. There are many ways that all of you here can fit into this vision. It’s going to take a lot of different people working together to fulfill the dream of a personalized health care system.

Here’s an idea for how you can help. One challenge in the development of useful diagnostic products and platforms is the integration of complex information. Much of this information is discovered, developed, and patented by fragmented groups of researchers in academia, industry, and the government. Intellectual property needs can severely complicate and delay scientific collaborations. The most scientifically and clinically valid products usually use all pertinent scientific data and shouldn’t be limited by I.P. issues. So any work you can do to generate a pathway for maintaining intellectual property while allowing rapid and fluid scientific collaboration would be very helpful.

On our end, I pledge to you I will strive to ensure that the government provides scientific leadership, encourages cooperation and collaboration among the right people at the right time, and resists the attempt or desire to micromanage.

Just as we saw how the President’s approaches to Medicare reform, stem cells, health savings accounts, and community health centers succeeded, we believe that value-driven health care is the direction health care needs to go.

Personalized medicine holds great potential for the entire health care industry. Its promise is great, and the future of this new frontier is very bright. Together we can rise to the challenge of personalized medicine. Thanks for listening. I hope I’ve given you some helpful thoughts — and I look forward to seeing your great developments in this area in the future.