Today in Washington, the House and Senate consider their respective versions of the budget before they close up shop for two weeks of spring recess. By reading the budget you can usually get a sense of the big-ticket items, but smaller-ticket items are usually left out of the text in the House, and only added in the Senate by floor amendment.

That's why I'm so surprised that the budgets of both Rep. Spratt and Sen. Conrad included specific text to create a reserve fund for a public-private entity for comparative effectiveness research -- i.e a way to find out what really works for patients and at what cost.

As the Senate Budget Committee's supplementary materials state:

"The purpose of such research would be to evaluate and compare the clinical effectiveness of two or more health care interventions, treatment protocols, procedures, medical devices, diagnostic tools, pharmaceuticals, and other processes or items used in the treatment or diagnosis of patients. This information could lead to savings over the long-term by allowing providers to avoid treatments that may be clinically ineffective, while at the same time improving health care outcomes." 

Hey, that sounds good, right? Even if you don't agree, there's an out taught to me by physician-economist Alan Garber last year at the Federal Reserve Bank of San Francisco. It's called reference pricing. For example, a private insurance company can cover two treatments for a specific medical problem, but if one is cheaper and/or more effective, the patient's share of the cost is lower. If the patient wants what has proved to be a more expensive and/or less effective option, they can have it -- if they're willing to pick up more of the tab (note: Medicare is a passive claims payer and is unlikely to adopt reference pricing).

The House Ways and Means Health Subcommittee held a huge, three-panel hearing on this issue last year, and it's been in the news more recently because of CBO Director Peter Orszag (Health Populi's Jane Sarasohn-Kahn recently covered this well both last fall and more recently). Heck, I even wove it into my winding WaPo.com piece last year.

Oprah's favorite health economist Uwe Reinhardt says we should treat the federal budget like a memo to God regarding our nation's priorities. I'd say making health care more effective and affordable fits the bill.