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89–500 2003

S. HRG. 108–192

THE FUTURE OF HUMAN LONGEVITY:

HOW VITAL ARE MARKETS AND INNOVATION?

HEARING

BEFORE THE

SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

WASHINGTON, DC

JUNE 3, 2003

Serial No. 108–12

Printed for the use of the Special Committee on Aging

(

SPECIAL COMMITTEE ON AGING 

LARRY CRAIG, Idaho, Chairman 

RICHARD SHELBY, Alabama 

SUSAN COLLINS, Maine 

MIKE ENZI, Wyoming 

GORDON SMITH, Oregon 

JAMES M. TALENT, Missouri 

PETER G. FITZGERALD, Illinois 

ORRIN G. HATCH, Utah 

ELIZABETH DOLE, North Carolina 

TED STEVENS, Alaska 

RICK SANTORUM, Pennsylvania 

JOHN B. BREAUX, Louisiana, Ranking 

Member 

HARRY REID, Nevada 

HERB KOHL, Wisconsin 

JAMES M. JEFFORDS, Vermont 

RUSSELL D. FEINGOLD, Wisconsin 

RON WYDEN, Oregon 

BLANCHE L. LINCOLN, Arkansas 

EVAN BAYH, Indiana 

THOMAS R. CARPER, Delaware 

DEBBIE STABENOW, Michigan 

LUPE WISSEL, Staff Director 

MICHELLE EASTON, Ranking Member Staff Director 

(II) 

C O N T E N T S 

Page 

Opening Statement of Senator Larry E. Craig ..................................................... 1

PANEL I 

Newt Gingrich, Ph.D., Former Speaker, U.S. House of Representatives, 

Atlanta, GA ........................................................................................................... 2

Richard Hodes, M.D., Director, National Institute on Aging, Bethesda, MD ..... 29

Peter Boettke, Ph.D., Director, Mercatus Center Global Prosperity Initiative, 

Arlington, VA ........................................................................................................ 42

PANEL II 

Stephen C. Goss, A.S.A., Chief Actuary, Social Security Administration, 

Baltimore, MD ...................................................................................................... 63

James Vaupel, Ph.D., Director, Max Planck Institute for Demographic 

Research Rostock ................................................................................................. 71

(III) 

(1)

THE FUTURE OF HUMAN LONGEVITY: HOW 

VITAL ARE MARKETS AND INNOVATION? 

TUESDAY, JUNE 3, 2003 

U.S. SENATE, 

SPECIAL COMMITTEE ON AGING, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:09 a.m., in room 

SD–628, Dirksen Senate Office Building, Hon. Larry E. Craig 

(chairman of the committee) presiding. 

Present: Senators Craig, Carper, and Stabenow. 

OPENING STATEMENT OF SENATOR LARRY CRAIG, CHAIRMAN 

The CHAIRMAN. The Senate Special Committee on Aging is convened. 

Good morning everyone. Let me thank you all for attending 

today. 

What a pleasure it is to share with you a phenomenal fact current in America today. People are living longer than ever before 

and, in most instances, living better. Americans enjoy an average 

life expectancy of almost 80 years of age. If you are Bob Hope, that 

life expectancy is 100 years and holding. Just last week he turned 

100 years old and, in typical Hope style, declared that he was so 

old they had canceled his blood type. We are currently investigating that type of blood. 

The future of human longevity, especially for Americans, seems 

bright indeed. Research on extending longevity has been legitimized over the past decade by advances in biotechnology and genetics. 

These advances have occurred largely in industrialized, free enterprise democracies. We hope to learn more about the powerful 

link among market processes, innovation, and human longevity. 

Longer life spans will have dramatic impacts on America. 

Today’s hearing will examine and educate us on the market, innovations, connections to longevity, and the impact such trends 

could have on our lives. Specifically, we want to learn more about 

the power of market forces to quietly spawn medical innovation, 

promoting longer lives and improving the quality of life for older 

Americans, and we want to better understand the long run pressures on Medicare and Social Security looking at the future of life 

expectancy in this country. 

The topic of today’s hearing is especially relevant at this time. 

Within the month legislation to improve and strengthen Medicare 

will likely be before the full Senate. Increasing choices in Medicare 

2

as the baby boomers move into retirement over the next 5 to 20 

years is critical to delivering high-quality and cost-effective care. 

Similarly, our Social Security system faces the same challenge of 

an aging population. The future of Social Security is no less important than Medicare to America’s seniors. 

Our hearing today will help enlighten the Congress regarding the 

promises, blessings, and challenges of increased longevity. 

So with that, today’s first panel, we are pleased to have three 

witnesses. Testifying before the committee today is a longtime 

friend and associate, a Congressman, former Speaker of the House, 

Newt Gingrich; an expert in markets innovation, and in health 

care. Joining Speaker Gingrich on the first panel is Dr. Richard 

Hodes, Director of the National Institute on Aging, and Dr. Peter 

Boettke, Director of Global Prosperity Initiatives at George Mason 

University at the Mercatus Center. 

Gentlemen, thank you all very much for being with us. Newt, 

Congressman, speaker, welcome to the committee and we will turn 

the time to you. 

STATEMENT OF NEWT GINGRICH, Ph.D., FORMER SPEAKER, 

U.S. HOUSE OF REPRESENTATIVES, ATLANTA, GA 

Hon. GINGRICH. Let me say, first of all, thank you, very much, 

Mr. Chairman. 

I think the topic you have raised is amazingly important. Let me 

just give you a specific example. I talked to one of my closest advisors last night, Dr. Steve Hanser, who had just spent a month in 

Europe. I said what were you seeing in Europe? 

Being a typical American with President Bush traveling, I 

thought I would get sort of a feedback about U.S.-European relations. He said, ‘‘I was in four countries and I saw four topics: pensions, pensions, pensions, pensions.’’ He said there is a pension system crisis in every European country he visited that he was followed by a health system crisis and 

followed by unemployment because the European answer has been 

to stagnate with a welfare state they cannot afford, which has actually caused a tremendous loss of jobs. 

So you are placing on the map with this hearing the moment to 

decide whether successful aging in America is an opportunity or a 

problem. I would argue that it is an opportunity, and that only bad 

public policy turns it into a problem. 

If you look at the total range of scientific breakthroughs that we 

are currently developing, we are about four times the speed we 

were in the 20th century. That is, literally between 2000 and 2025, 

We will have as many breakthroughs in new science and new technology as we had in the entire 20th century. 

Information technology, biology, and nanoscale science and technology are the key areas. Dr. Sam Stupp, who is a world class specialist in nanoscale science at a firm called Nanomateria, believes 

that within a decade we will begin to see the ability to regenerate 

spinal cord injuries, to potentially regenerate retinas, and that this 

kind of breakthrough, this consistent evolution, is incredibly important in developing the future. 

If I could draw sharply the contrast something that Bill Novelli, 

the head of AARP has often discussed baby boomers want a second 

3

start. They do not want a long retirement. They do not want a period of doing nothing. They do not want to decay. They do not want 

to be a burden. 

They want to see the years of aging as a process of healthy independent living where they are doing interesting things in a way 

that is significant. It is vital that we not allow bureaucracy to cutoff access to all the new developments, all the new technologies, 

and all the new opportunities. 

I find it a great irony that in competing with the Soviet Union 

and in advising Third World countries, we consistently say that 

market systems work better than centralized bureaucracies, yet in 

health we stay with centralized bureaucracies. 

In the book that just came out that I co-authored, Saving Lives 

and Saving Money, we outline how to move toward a much more 

market-oriented system. At the Center for Health Transformation, 

we are developing those ideas. I can summarize it in four driving 

principles and then one example. 

The first principle is patient safety and patient outcome. If we 

simply design a system where we allow patient safety and patient 

outcome to be the dominant factor, we will rapidly see the kind of 

changes we need. For example, electronic prescribing would save 

dramatically in doctors’ time, in money, and in patient safety. 

Forty percent of all prescriptions today require a callback either because the pharmacist cannot read the writing, because the medicine prescribed is inappropriate, or because there is a less expensive medication available that the doctor could use. 

The result is that people die, and people get sick. Medication 

error is the largest single cause of senior citizen emergency room 

visits. Yet, we have had for years a palm pilot model of electronic 

prescription which would save money and save lives. 

So the first thing we ought to consider are the appropriate outcomes? In Medicare, for example, you would have a comorbidity 

management system for everybody because 50 percent of all Medicare spending is on 5 percent of the population, and that 5 percent 

has five or more comorbidities. That is they have five different diseases simultaneously. If you handled them as five separate diseases in one human being, you get all sorts of secondary effects. 

But if you deal with the person as a single person, you have enormous improvement in their outcomes, as demonstrated with two 

quick examples. 

There is a firm called Evercare which specializes in people in 

nursing homes over 80 years of age, a third of them with Alzheimer’s. 

They put together an electronic medical record, and the first 

thing they do, on average, is reduce the senior citizen from 22 

medications a day to 6. Sixteen fewer drugs a day. That reduces 

hospitalization by 50 percent. 

It is an amazing outcome story. So, the Medicare reform this 

year should absolutely include comorbidity management and making sure that people have all of their diseases treated in a medically correct way, something which Dr. Zerhouni out at NIH is 

working on and believes could save up to 40 percent of the cost of 

the current system. 

4

The second principle is to take all the breakthroughs in information technology and computerization and apply them directly to the 

health system. It is possible today to have an electronic intensive 

care unit. There is a firm called Visicu that has one. Both of the 

examples are in Saving Lives and Saving Money. 

That electronic intensive care unit, it is estimated by the 

Sunterra Hospital System, is saving one life per bed per year in 

better care. It is accelerating recovery by 20 percent, allowing them 

to use the same number of intensive care beds more often, and it 

is improving nurse retention while minimizing hospital-induced illnesses. 

Now this is a fact. What I am describing is not a theory. The 

Senate can visit Norfolk and see a facility at work today which is 

changing history. If you apply information technology across the 

board, you get computer order entry of drugs in hospitals which 

could save up to 50 percent of medication errors in hospitals. This 

is in the Administration for Health Research and Quality report. 

Britain, for example, has now bid having an electronic health 

record for every person in Britain. One of the people who designed 

that program, the head of Health Trio, which runs an electronic 

health record program for Brigham and Women’s Hospital in 

Boston, estimates we could have an electronic health record for 

every American for about 10 cents per month per person. That is 

$28 million a month for the whole country to have an electronic 

health record, which would dramatically improve outcomes, dramatically improve accuracy, and would both save lives and save 

money, which seems to me ought to be the goal. 

The third principle is to create a culture of quality. I will just 

give you two examples where the funding is perverse. Two million 

people a year get diseases in hospitals, 1.5 million a year get diseases in nursing homes. In other words, if you are in a hospital for 

more than four days, the odds are even money the hospital will 

give you a disease, which it will then charge you to cure. 

But if you are a hospital that does a fabulous job, if you had a 

perfect record and nobody in your hospital got an additional disease, you would reduce the number of days of hospitalization, and 

you would lower your gross revenue, and you would end up losing 

money. 

Now it is fairly easy to have CMS decide that the best 25 percent 

of all hospitals will get a bonus and to share with the hospitals 

one-third of the money they save the government. There is no question we can have a data base that statistically proves this. There 

is no question you could create the right incentives. But we do not 

today. 

The same thing happens with the hip and knee surgeons. If you 

are a great hip and knee surgeon and you have a fabulous outcome 

and everything works perfectly, you actually get paid less than if 

you are an inadequate hip and knee surgeon. It is exactly the opposite. It is as though we paid for our Ferrari and we got a Subaru, 

and we paid for a Subaru and we got a Ferrari. It is exactly the 

opposite of a sound, intelligent system of using the market to create a culture of quality and to create a system of quality. 

Last, if you really want an efficient health system, you want to 

rethink the health system from the ground up, from individuals 

5

first, and then going to the patient, and then going to intensive 

care. 

Let me make this clear. When we first started drafting Saving 

Lives and Saving Money, we talked about patient-centered care 

until we visited the Nestle’s laboratories in Switzerland. Nestle’s 

has over 150 scientists who work on nutrition every day. 

They made the point that probiotics, the right important bacteria 

in your digestive system, is as important as antibiotics. You can invent, for example, a priabar that would be for osteoporosis. You can 

literally invent a health bar for diabetics. 

Their argument is, and this is something that Dr. Zerhouni at 

NIH agrees with emphatically, that you can design a system that 

starts not with the patient, but it starts with the individual in a 

prediabetic environment, a pre-illness environment. 

We are working with Novelli and Ortiz to design a national 

standard for diabetes. Part of that national standard would be to 

know that you are prediabetic and how you ought to change your 

diet and exercise before you ever become diabetic. If you are ever 

to become diabetic you have the ability to learn as early as possible 

before any damage is done to you, and to learn how to manage 

yourself to minimize the four great risks of diabetes. 

I mention diabetes because it is the largest single health driver 

in Medicare. It is every seventh dollar of Medicare. Heart disease, 

kidney dialysis, amputation of legs, and blindness are the four 

major outcomes of diabetes. We should not undervalue this 17 million Americans are diabetic, and another 8 million are prediabetic. 

Unfortunately, the rate has gone up because of poor diet and exercise patterns in the country. 

My point is that you want to think about aging from the standpoint of keeping the individual healthy as long as possible, 

incentivizing health, informing health, from taking care of selfmanagement by the individual as a patient, and then going to traditional medical care. It is a very different model than the current 

system. 

I will close with one example of what is clearly technically possible. 

When I am out on the speaking circuit, I start the general audience by walking them through automatic teller machines, self-service gas stations with credit cards, and using Travelocity or Expedia 

or one of the Internet-based airline and hotel reservation systems. 

I do that to get audiences into the rhythm of realizing that in their 

daily life, they now do things that involve very sophisticated levels 

of information handling and they do it routinely and they do not 

even notice it. 

Then I say, ‘‘Now let us talk about health where you get paper 

records, paper prescriptions, paper billing, et cetera.’’

I would hope that the Congress, as it looks at Medicare, would 

think of a 21st century model of the drug benefit. I will describe 

it very briefly. Based on the Travelocity model, it goes back to your 

market point. I really worry about going to a pharmacy benefit 

manager model where you are going to have aggregated purchasing 

by third parties, rebates becoming kickbacks in political language, 

an ensuing chaotic mess. 

6

What I would recommend is that you go to the doctor with a 

Travelocity model of Medicare benefit in mind. 

If you had a very rare disease or a very rare genetic circumstance, the doctor would give you the precise prescription for 

one drug only. The government should then figure out what it is 

going to subsidize that purchase. But in most cases, particularly for 

chronic illnesses and for things that are not tremendously acute, 

what you are going to get is a prescription for a class of drugs. This 

is how the whole pharmacy benefit management model works, 

where you have $10 co-pay, $20 co-pay, or $30 co-pay. 

I would reverse the system. The doctor and you should have access to a Travelocity-style page where you see every drug available 

for that particular problem. I would include medically appropriate 

over-the-counter medicine. It is absurd to take Claritin, which was 

one of the most widely prescribed drugs in the country until it went 

over-the-counter the second the price crashed, we do not count it 

as a medical expense. We are incentivizing high cost and then act 

shocked that we get high cost. 

The current system encourages the pharmaceutical company to 

have the highest possible price so they can offer the biggest rebate 

to the pharmacy benefit manager so that they then have a lowerprice based on this. It would be like going into a car dealership and 

being told we have a $600,000 Ford, but for you Senator Craig, we 

will give you a $560,000 rebate, so you are getting a $40,000 purchase. Don’t you feel good about that rebate? That is how the drug 

business is today. It is totally backward. 

What ought to happen is that the senior citizen, in consultation 

with the doctor and with their pharmacist, could pick any drug out 

of this list and the government ought to finance 100 percent of the 

least expensive drug. Then make that dollar value available on an 

open formulary for anybody else to buy any drug they want. 

So if you saw the commercial last night, fell in love with it and were convinced, and you want to put up $150 bucks out of your 

own pocket, it is your right as an American. 

But if you decide you need an effective—and again, medically effective, quantitative data analysis based, FDA and NIH supervised 

medically appropriate, least expensive drug, your government will 

pay for all of it. 

Now, if you want to have a range of choices, fine. We should not 

restrict you. I just suggest you look and think about that. 

That would be a market-oriented system that would teach the 

drug companies to worry about the value of their drugs, teach them 

to have an end-state price, would teach the individual to look at 

what their choices are and make the choice, and dramatically increase the range of freedom and most importantly be the right step 

toward a Medicare for the baby boomers—that allow the baby 

boomers to have control of their own lives. 

[The prepared statement of Mr. Gingrich follows:]

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The CHAIRMAN. Mr. Speaker, Congressman, you have challenged 

us once again. That is why I was excited when we found you would 

be available to come with this panel today to visit about the innovations in the marketplace, the thinking you are doing, and the 

work you are doing with others. 

Before we turn to our other two panelists, let me recognize colleagues that have joined us today, and ask Senator Stabenow, do 

you wish to make any comment before we resume the panel? 

Senator STABENOW. Thank you, Mr. Chairman. Welcome to a 

former colleague in the House of Representatives. It is a pleasure 

to have you with us. 

The CHAIRMAN. When I was in the House, Senator Carper was 

there, along with Congressman Gingrich, and we worked together 

on many issues. 

Senator CARPER. I do not know that we are the three amigos, but 

sometimes we were. 

The CHAIRMAN. On occasion. 

Senator CARPER. Maybe on some of these issues we can be again. 

Newt, it is great to see you. Thank you for joining us. 

To our other witnesses, we are delighted that you are here, and 

we look forward to your testimony. Thank you. 

The CHAIRMAN. Thank you both. 

Now let me turn to Dr. Richard Hodes, Director of the National 

Institute of Aging. Doctor, welcome. We are glad to have you with 

us today. 

STATEMENT OF RICHARD HODES, M.D., DIRECTOR, NATIONAL 

INSTITUTE ON AGING, BETHESDA, MD 

Dr. HODES. Thank you, Mr. Chairman, and members of the committee for the invitation to speak to you about longevity and innovation in aging research. 

As the Chairman mentioned, and as Mr. Gingrich reinforced, we 

are really living in an era of unprecedented longevity, as well as 

quality of life in which more and more Americans and citizens of 

the world live not only longer lives but lives that are robust and 

high-quality. Longevity has increased from around 1990 where the 

life expectancy in this country was about 49 years of age, to the 

current time when we are in the high 70’s and approaching 80, 

facts we will hear a good deal about in the demography session to 

follow this. 

However, there remain great challenges to those in older life, 

challenges of disease and disability. These challenges will be addressed by new areas of technology. Some of them we have heard 

mentioned, nanotechnology, computational biology, proteomics, 

genomics, and I hope to share with you in these next few moments 

some examples of these. 

It is urgent that we apply such technologies to early diagnosis, 

to identification of people at risk, and ultimately to the installation 

of favorable behaviors, to engender lifestyles that will minimize 

disease and disability. 

In the examples that I would like to share with you today, I 

think we see on the horizon the outcomes of an ever accelerating 

degree of discovery, which I agree with the previous speaker, really 

30

bodes well for the future if we are only able to apply the success 

of research in a variety of areas. 

Let me begin with some examples. One of the most intriguing 

areas of research in longevity is that which deals with the role of 

genes in life expectancy and longevity. This is research which has 

proceeded in a variety of species ranging from yeast to worms to 

flies, ultimately with application to humans. 

What is illustrated here is one example, in the graph to the 

right, which shows you the life expectancy of C. elegans, a worm. 

You can see what is plotted here is the number of the population 

that survive at various ages. 

In the first curve, that falls off to the left, you can see that about 

50 percent of animals have died by about 2 weeks of age. Some live 

as long as 20 days. But the remarkable finding illustrated here is 

that mutation in a single gene of the 17,000-some-odd genes in this 

species results in the curve you see to the right, a shift which is 

equivalent to a doubling or tripling of life span. 

Moreover, if one looks at the table to the left, one can see this 

is only typical of a variety of mutations that have this kind of effect. Importantly, they teach us something in that they fall into defined and understood pathways of metabolism. In this case, for example, pathways that have homologs in the human and relate to 

insulin and insulin-like receptors. So they point the way toward the 

biology of human behavior, disease and open avenues to understand what determines longevity, absence of disease, and multiple 

targets for future interventions. 

In addition to research aimed at longevity itself it is critical that 

we address some of those disease which still challenge both lifespan and quality of life, and I would like to address just briefly examples from two of those arenas. The first that I will touch upon 

is the area of neurodegenerative diseases. These are diseases such 

as Alzheimer’s disease and Parkinson’s, which take a terrible toll 

on those who are affected, predominantly those in older age. 

Much of what we have learned about the diseases has come from 

technical innovation. One of the innovations that has been most exciting is that of imaging. So we have learned, and many of you are 

aware, that techniques such as MRI or PET scanning allow us now 

to have structural and functional insights into what goes on in the 

brain, including the human brain. 

Illustrated here are some recent findings, yet to be published 

which illustrate a new technique in which a gene has been engineered that acts as a reporter. So that when cells and parts of the 

brain are damaged by an insult, they actually induce a product 

which causes the emission of light, a luminescence that can be detected by cameras very sensitive, models like those used to detect 

light from stars at great distance. 

What you see here is actually the colored image of damage to 

brain cells caused by, in this case a chemical insult, that makes it 

possible to study both the normal biology of brain, the effect of insults, ultimately the effect of interventions designed to reverse or 

prevent damage to nerve cells. All this in a living animal and hopefully therefore technology that will be translated to understanding 

of the human condition and human disease. 

31

The second area mentioned moments ago that is an enormous 

cause of disability and disease is that of obesity, secondary in large 

measure to behavioral changes in the population and responsible 

for a good deal of the morbidity associated with diabetes, heart disease, and cancer. 

What is illustrated here is yet another new technology, that of 

using RNA interference, in which types of RNA are capable of neutralizing the messages which are encoded by each of the genes in 

an organisms’ genome or chromosomes. This experiment was conducted using such a technique in understanding what influences 

the regulation of fat metabolism and obesity. 

In this case, every one of the 17,000 genes effectively was neutralized and the effect of each of these events plotted. As you can 

see, the discovering here was that some 305 genes, when inactivated, caused a decrease in fat. That is decrease in the red staining you see. Some 112 genes, when inactivated, caused obesity, 

again providing now multiple targets for our understanding of this 

important public health problem and our opportunity to address it. 

These examples pose a reason for being optimistic of our ability 

to maintain not only the extension of longevity that has been evident over the past years, but to do so in a way that minimizes disease and disability. 

I thank you, Mr. Chairman and members of the committee, for 

holding a hearing on this very important subject. Thank you. 

[The prepared statement of Dr. Hodes follows:]

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The CHAIRMAN. Thank you very much, Doctor. We appreciate 

your presentation on some of that new work that is going on. I 

think you filled the bill this morning. 

Now let me turn to Dr. Peter Boettke, Director of Global Prosperity Initiative. 

STATEMENT OF PETER BOETTKE, Ph.D., DIRECTOR, 

MERCATUS CENTER GLOBAL PROSPERITY INITIATIVE, 

ARLINGTON, VA 

Dr. BOETTKE. Thank you, Mr. Chairman and members of the 

committee, for this opportunity to add my comments to the record 

on this very important public policy issue. 

I have spent my entire career, I am an economist, and I have 

spent my entire career investigating the basic question of why 

some countries are rich while other countries are poor, particularly 

with respect to countries that are now referred to as transitioning 

economies or less developed economies. 

The main points that I want to make on the relationship between 

economics and the question of longevity is the first one, which is 

reinforce a comment that has been made by both of our speakers, 

which is that modern man in Western democratic capitalist societies benefits from medical care, medicines, and medical technologies that enable them to live longer and more fruitful lives to 

such an extent that even kings and queens of a previous era would 

have been envious of. 

Economic growth, GDP, is not an end in itself. We do not eat 

growth rates. We pursue economic growth because it enables people 

to live better lives. Economic growth is the greatest hope for the 

world’s poor and measurements of economic freedom are positively 

correlated with economic growth. Economic growth is positively correlated with human longevity. 

I have these graphs here which are plotting different countries 

that we have data for. In the graph on the left, we have countries 

ranked by their economic freedom, and we have their per capita 

GNP rates over here. 

What we see is that countries that are defined as repressed are 

the ones that we find struggling in terms of economic survival. The 

ones that we rank as most free on this index of freedom, we are 

looking at things like monetary policy, security of property rights, 

tax rates, regulation, open international trade, basically a composite of about 10 different variables. 

Then on the next graph on the right, what we are looking at is 

the per capita GDP rates and then the life expectancy that is experienced in those countries. We see in both of these examples, what 

we have is a relationship between—as we get more economic freedom we get higher rates of economic growth. As we have more per 

capita GNP, what we end up having is longer lives. 

To put it simply, wealthier is healthier. 

So the most important public policy issue that we face in addressing the problems of less developed economies, or the transition 

economies, or in our own country is to pursue public policies which 

allow markets to flourish and to generate economic wealth. 

The contrast between the command and control approach versus 

the open society is most evident in the Soviet Union and in the less 

43

developed countries. Just last week in the New York Times, Mary 

Feshback, a demographer from Georgetown University, reported 

findings about the difficulties that confront Russia. 

The data provided shows that the Russian population will decline 

by 30 to 40 percent by the year 2050. For every 10 babies that are 

born in Russia, 17 Russians die. Death by tuberculosis in 2001, for 

example, were 29,000 compared to 781 in the United States. Heart 

disease deaths per 1,000 people in 2001 were recorded as 893, compared to 352 in the United States, more than twice as many. 

Current life expectancy in Russia is 58 for men, 72 for women 

versus the life expectancy we experience in the United States. 

On that issue, I should point out that between 1960 and 1985, 

the Soviet Union was actually the only industrialized country in 

the world to experience a decline in life expectancy. So it is not because of the recent transitions that life expectancy is going south. 

In Russia this is actually a longer-term trends that dates back to 

the Soviet era. 

Markets, in contrast, give us the freedom and innovation that enables us to live longer lives. Human longevity, I would argue, is a 

function of four things. The increases in technological efficiency 

and economic organization that reduce the physical labor required 

for us to produce output. 

Second, the increases in technological efficiency that improve the 

work and general environment in which we work and live. 

Environment, the general environment, environmental quality is 

actually a luxury good. As our incomes go up, we actually consume 

more environmental quality. So one of the things that we want to 

do is make sure that incomes are going up. 

Increases in medical knowledge, including treatments and medicine, and increases in medical technology, which include diagnostic 

techniques, surgical procedures, and equipment. Each of these four 

things are the result of the open society and its market economy. 

Markets give us the freedom to prosper. 

In conclusion, I just want to emphasize the point that an open 

society is a necessary precondition for the sort of improvements in 

our economic environment and generates the medical innovations 

that enable us to live longer and more enjoyable lives. 

I want to take this opportunity to thank the committee for holding these meetings on this very important topic. Thank you. 

[The prepared statement of Mr. Boettke follows:]

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The CHAIRMAN. Dr. Boettke, thank you very much for your testimony and analysis of different countries. I think that is extremely 

illuminating. 

I was just in Russia. I think that my life would be much shorter 

if I had to live there. The only thing enjoyable about it was the 

visiting of the Winter Palace. I must say that. 

That is not a criticism of Russia. It is just the reality at never 

having been there before. It was a shock to me that I was not prepared for, as it relates to the country and how it was functioning 

and not functioning. Recognizing that the things we take for granted just were not there. 

Having said that, Mr. Speaker, let me turn to you. As I ask this 

question, the rest of you may wish to respond to it because obviously, Dr. Hodes, your testimony certainly lends to what Speaker 

Gingrich has said in his opening statement, that breakthroughs of 

the next 20 years will equal the entire 20th century as it relates 

to health and health-related areas. Clearly some of the things you 

were talking about is on the cutting edge of that kind of innovation 

and technology. 

Newt, I have known you as a Congressman, and a historian, and 

now you are an observer of technological development and trying 

to bring it into context with your books and your speaking. Why? 

Why are we on this phenomenal path of acceleration at this moment in our Nation’s history? 

I am obviously much more aware of it, probably because I am 

getting older, but also because I chair this committee and I tend 

to focus and read more. I found it interesting the other day, the attention of a small clip on the news and in the paper, a lady out 

in California died, the oldest living American, 113 years of age. She 

had worked until she was 97. She had lived independent until she 

was 102. She passed away at 113. 

Obviously she has been assisted along the way, she probably had 

some good genes, too. But respond to that comment, if you would, 

about that phenomenal acceleration that is currently underway? 

Hon. GINGRICH. I think there are a couple of factors. First of all, 

I think the Congress and the political system deserve some of the 

credit. We came out of the Second World War having discovered, 

with Vanover Bush’s leadership, how dramatically science could 

impact national security. We created institutions like the National 

Science Foundation, the National Institutes of Health. As you will 

remember, even in trying to balance the budget and work on 

spending in the late 1990’s, we committed to doubling the size of 

the National Institute of Health budget. 

I would point out that the Hart-Rudman Commission, which I 

helped create with President Clinton and then served on after I 

stepped down, issued its first warning when it came out in 

March 2001, arguing that the greatest threat to the U.S. was a 

weapon of mass destruction going off in an American city probably 

by terrorists, and that there was a need for a homeland security 

agency. After September 11, that got a great deal more attention 

than it got before September 11. 

But the second warning we made was that the failure to continue 

investing in science and math, and the failure of science and math 

education was the second greatest threat to the U.S. after a weapVerDate 0ct 09 2002 10:41 Nov 18, 2003 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 C:\DOCS\89500.TXT SAGING1 PsN: JOYCE
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on of mass destruction going off in a city. We said that it was, in 

fact, the failure of math and science education ‘‘is a larger threat 

to the United States than any conceivable conventional war in the 

next 25 years.’’ So I would say to you, on one hand, I am very optimistic about 

the scale of change. On the other hand, I am very worried about 

how much of that will be done by Americans in American labs as 

you project out over the next 20 years. 

What has happened is basically a three-part process. First, massively bigger investment of resources. Without the scale of investing, and without the Advanced Research Projects Agency, you probably would not get the Internet for another 30 years. It is a Government-funded program and it was Government funding which led 

to the breakthroughs that created modern personal computing. The 

whole process of that investment in basic education, in graduate 

fellowships, in research grants, in research facilities is very important. 

The second is that the rise of the Internet creates an ability to 

transmit knowledge in real-time, which becomes its own multiplier. 

Ideas that used to take 20 years or 30 years to be transmitted suddenly start to permeate the system almost overnight. 

The third is that there is a cumulative breakthrough in knowledge, and I would say this one of the things that we tend to undervalue as non-scientists, and in instrumentation. It was impossible 

25 years ago to look at an atom. There are now instruments that 

allow you to look at a single atom. 

Now that breakthrough creates new capabilities. I say this because I think one of mistakes I participated in as speaker was too 

narrowly focusing our investment. I think we should have insisted 

on dramatically increasing the National Science Foundation at the 

same time we increased NIH. 

I say that because it is math and physics which makes possible 

MRIs and CAT scans, and other important life-saving devices. 

What you have today is more scientists and technicians working 

at much higher speeds through the Internet with very significant 

investments getting breakthroughs. 

My last comment would be on nanoscale science and technology, 

where I participated with the NFS in several workshops. This is 

not a topic to take the committee off on in detail. But it is very 

hard to overstate how profound the transition is when you enter 

the area of nanoscale science and technology and you enter the 

zone of quantum mechanics. 

The reason I was intrigued with what Dr. Stupp is doing is that 

you are beginning to get folks who approach all of this biological 

activity not as a function of genetics, but as a function of what actually happens at the atom and molecule level on the presumption 

that if you can re-create that, without regard to how it happens, 

the impact is stunning. 

They are literally beginning to think you can regrow spinal cords 

by developing precisely what happens when the atoms and the molecules work together to create the original spinal cord. 

This is so profoundly different than any approach we had 15 or 

20 years ago. It would be a great surprise to me if we did not equal 

the 20th century in the next 20 or 22 years. 

55

The CHAIRMAN. Either of you gentlemen wish to add to or make 

comment in relation to that? 

Dr. HODES. I certainly would be happy to. 

I would echo very strongly the very perceptive comments that 

have been made. While it is always a little uncomfortable for scientists to make specific predictions which are not research-based, 

I think if one simply takes the trajectory of scientific discovery as 

measured in almost any parameter conceivable, and projects from 

recent past to the future, it is hard to arrive at any expectation or 

prediction other than that which was just expressed, namely that 

we are on such an accelerated rate of increased discovery that the 

next decades are going to proceed at a pace that we have never 

seen before. 

I would also agree very strongly with the general comments 

made about the contributions to this role. There is, above all, to be 

credited the genius of individual scientists. But scientists have always had that genius. 

I think the way in which their contributions have been accelerated and multiplied is very much reflective of just what you have 

heard. When a single discovery is communicated almost instantaneously, and enhanced by the availability of technology and means 

of communication, this produces the exponential change in rate of 

discovery, communication, translation from one step to the next. 

It is no longer the laboratory in an individual room by an investigator meticulously crafting a conclusion which he puts down on 

paper which weeks or months later is presented to a scientific 

meeting. It is now clearly instantaneous communication of technologically enhanced discovery that is responsible for this growth. 

It is important, I think, as well to reinforce the significance of 

the support by Congress over these past years, most notably in this 

past 5 years with a doubling of the NIH budget. 

A great deal of what I have reported as examples, as case studies, and the progress that has been made, has been enormously dependent upon the investment by the American people through Congress and the administration in these areas. 

The CHAIRMAN. Well, the good news is while we recognize the 

value of that investment in the biological sciences and health, we 

are beginning to recognize that we are not making any equivalent 

investment in the physical sciences. I think that is beginning now 

to percolate upward here because we are seeing, as you have explained, Congressman, the clear commingling of those and the acceleration that happens when those sciences come together effectively. That work, or at least those considerations, are well underway now. 

Let me turn to my colleague, Senator Stabenow. 

Senator STABENOW. Thank you, Mr. Chairman. Thank you again 

to everyone. 

I could not agree more that this is an exciting time in terms of 

technology and innovation, and that there is much to do in this 

area, and that it is a wise investment for the United States to be 

able to be focused in those areas. 

Newt, you were talking about prevention. I think one of the important areas for us to refocus both Medicare, Medicaid, other inVerDate 0ct 09 2002 10:41 Nov 18, 2003 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 C:\DOCS\89500.TXT SAGING1 PsN: JOYCE
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surance systems, is on prevention and the dollars that can be saved 

here. 

But I am wondering, we are about to enter into a Medicare debate this month, about how we proceed under Medicare. Medicare 

is the one piece of universal health care we have in this country. 

We have made a commitment for older adults and for the disabled 

in our country. We also will be debating issues of costs in prescription drugs and how we bring down those costs using market factors 

in order to be able to lower prices for our businesses large and 

small and individuals, and so on. 

I am wondering, Mr. Speaker, if you might speak—you were 

talking about market forces. I know, in reading just a little bit of 

the beginning of your book, you talk about the market forces and 

how we use that to bring down prices which will affect what we 

can do under Medicare prescription drug benefit, what we can do 

in the private sector. 

I live in Michigan right next to Canada. We can look across the 

river and see another country where American-made drugs are offered at half the price that they are in our country. I wonder if you 

might speak to the notion of opening the border. We have free 

trade around the world. We have free trade certainly between Canada and Mexico and other countries. 

I have legislation with colleagues that is specific to Canada that 

would open the border to free competition, understanding that 

their safety system in terms of FDA-type approvals are very, very 

similar to the United States, and the fact that those prescription 

drugs already come back and forth. It is just under the auspices 

of the companies right now, as opposed to individuals or pharmacists. 

But how do you see market pressures in the global economy as 

it relates to pricing for prescription drugs which are such a big 

driver today in the whole question of cost as well as quality of 

care? 

Hon. GINGRICH. You have asked an extremely important question. I appreciate you raising it this way. I think it really breaks 

into three components. 

First of all, on the Canadian issue, I think as long as the regulations are the same, I personally do not see why NAFTA does not 

apply to Canada. I would draw a difference with Mexico where I 

think it is very hard to determine whether you are getting counterfeit drugs or inappropriate drugs. 

But it does strike me as utterly irrational to expect somebody in 

Detroit, in a free society, to voluntarily only buy from their own 

drug store, knowing that if they go across that bridge they can get 

it at half price. 

Now I would point out that in both France and Canada generics 

are much more expensive than they are in the U.S. but nonetheless 

I still agree with you, maybe to the horror of some of my former 

colleagues. 

Senator STABENOW. I can quote you as supporting our bill when 

this comes up? 

Hon. GINGRICH. As you know, the Congressman from Minnesota, 

Gil Gutknecht, has also had a similar bill on the House side. I said 

two years ago that I did not understand why we were punishing 

57

Americans by artificially restricting them as long as the drugs are 

effective. 

So first of all, I do think that you make a strong case. 

There are two other considerations. The reason I proposed the 

Travelocity model is that I am really worried—and your state is 

taking a leading role in this—and by the way, I do not blame them 

for this about Medicaid. When you get to aggregated purchasing 

with governments, governments inevitably cheat. Why do the Canadians get such cheap prices? In part because they say to the 

drug companies, ‘‘we will steal your license if you do not sell it to 

us.’’ Why do the French get such cheap prices? Because they say, ‘‘we will steal the license and give it away.’’ By the way, in France they actually spend more per capita on 

drugs than we do. But the American-made drugs are very cheap 

while the French-made generics are very expensive. It is pure nationalism masquerading as health policy. 

In the long run, if every place in the world cheated the drug companies at the same rate that the French do, you would have very 

little new drugs coming in and it would be a very severe problem. 

But the answer is not to artificially keep high drug prices. The 

answer, first of all, is to get to a genuine pricing mechanism that 

is real, where you know that of these 12 drugs, this is what their 

real price is and you choose. The sooner we can get to that, you 

will have exactly the same downward pressure on pricing you get 

from Travelocity and Expedia and the airlines industry. This is not 

a pro-big company position. 

All the old airlines find it very hard to compete with Southwest 

and Southwest has made a profit for 29 consecutive years, because 

they are structured differently in their cost structure. I think you 

would have a similar period of difficulty. 

The other comment I want to make is that, when you are thinking about health costs, it is true for the last couple of years that 

drug prices went up faster. However, last year hospital prices went 

up faster. 

I think you will find very rapidly that trying to solve one piece 

at a time never quite works because costs just shift around in the 

system. That is why you want to go as much as you can and this 

is not about transferring money. Taking care of senior citizens is 

important, and we should do it. But getting the decision as close 

to the senior citizen as possible, and as far away from the public 

and private bureaucracies, actually leads to better decisions and ultimately to lower costs. 

Senator STABENOW. I think it is an interesting comment, using 

the Travelocity approach. In Michigan one of the things that was 

done under a prior Governor was setting up formularies, essentially what prices—what kinds of drugs would be paid for under 

Medicaid and you would have to justify going beyond that, in terms 

of efforts of looking at costs, cost-effective drugs and so on. 

Of course, this is something highly fought. In fact, our state was 

sued by the major companies, as a result of trying to get a handle 

on something like this. 

So I think, assuming that—I would guess they might call this 

price-fixing or something like that, but I think you are absolutely 

correct that finding what is the lowest effective medication and 

58

pricing that, and being willing to pay for that, and then people can 

have a different drug if they choose. If they want to go with the 

pretty pictures on television and go with something higher, they 

can. I think that that is an interesting approach to look at. 

Hon. GINGRICH. Let me just comment very briefly. There are two 

distinctions. The first is, I believe in an open formulary. When you 

get into closed formularies, you end up with somebody other than 

you making a decision that eliminates your right to choose a drug. 

So this would be an open formulary that you would pay the difference. 

The second is the co-payment model we got to is actually perversely reversed. If I go in and I know I have to pay $10, I actually 

have an incentive to buy the most expensive drug because psychologically I think I am getting a better return on my $10. So I am 

actually driven toward more expensive drugs because if it is an $80 

drug, I get back $8 for every $1 I put in. Whereas, if I only get 

that $40 drug, I am only getting back $4. 

If, on the other hand, you subsidize up front, then I get the least 

expensive drug for free, and I am taken care of. But if I want to 

then add out of my own pocket beyond that, it is a much clearer 

economic system than the way we historically, in the last 20 years, 

evolved into the current copay model. 

Senator STABENOW. Just in closing, a comment. I would say for 

those who have insurance, at this point they are not probably looking at the price, I would say, in terms of what you are talking 

about. But for those who do not have insurance, most of whom are 

seniors and so on, they are clearly looking for the cheapest price 

that they can find at this point in time, given the choices that they 

have to make. I think the debate this month in the Senate will be 

very important as we decide how to strengthen Medicare. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. Senator Carper. 

Senator CARPER. Thanks very much. I just want to start off by 

asking, is it Mr. Boettke or Dr. Boettke? 

Dr. BOETTKE. Dr. Boettke. 

Senator CARPER. Is it Dr. Hodes? 

Dr. HODES. Yes. 

Senator CARPER. Mr. Gingrich? 

Hon. GINGRICH. Yes. 

Senator CARPER. All right. 

Let me ask Dr. Boettke and Dr. Hodes to just respond to a couple 

of things that our former speaker has talked about. First of all, let 

us just take one of the issues that you raised, and that is the electronic prescribing of medication. Your reaction to what he is suggesting, good idea? Bad idea? Do you see any problems with it? 

Dr. BOETTKE. No, I think actually that Travelocity model seems 

to be a pretty interesting one. I have not looked into it. I would like 

to look into it more. 

I do think that the former speaker made extremely important 

comments about trade and pricing and also competition, and I 

think he also made very important comments——

Senator CARPER. Let me stop you, Dr. Boettke. I want to take a 

very narrow thing that he said, that he was talking about. 

59

Speaker Gingrich, just take a minute and tell us again what you 

are talking about, the notion of prescribing medication electronically rather than by paper. 

Hon. GINGRICH. There are two powerful reasons you want to 

have electronic prescription. The first is accuracy. Doctors’ handwriting is often not as clear as it could be. Very small marginal 

changes can lead to people getting killed, which has happened last 

year in this city, a young lady was given 10 times the dose because 

they misread what the prescription should have said. So the first 

is an electronic prescription done on a Palm pilot or something else 

that is very accurate. 

The second is that by being type electronic, it lends itself to 

measuring by an expert system to determine whether or not you 

are already taking a drug you should not be taking. Let me give 

you an example. 

In Rhode Island a few years ago, 25 percent of all the emergency 

room visits by senior citizens was a result of being given the wrong 

medicine. So for both accuracy’s sake in writing and for accuracy’s 

sake in measuring it against your own medical record, I think electronic prescriptions will dramatically improve the system. 

Finally, because 40 percent of all prescriptions currently require 

callbacks, you both save lives and save money because the pharmacist will not be calling you back and the doctor will not be wasting their time re-explaining what they have already done. 

Senator CARPER. Dr. Hodes, your reaction to what he is suggesting? 

Dr. HODES. I think these are extremely good points and importantly they are based not only on intuition, which would support 

them, too, but on a good deal of testable hypothesis. This actually 

is an important area of ongoing research, as well. 

In particularly with older individuals who, even under the best 

management, are likely to have, as has been noted, a number of 

comorbidities and face the challenge of needing medications for 

multiple conditions, it is a real challenge even to the most sophisticated of physicians and pharmacists to track appropriately the 

multiple potential interactions. The data base that is the underpinning to an electronic prescription system really allows one to address this. 

One can go still further, I think, on the same theme and talk 

about measurement of compliance and the importance especially 

with older individuals with very complicated drug regimens. That 

can be used by providing electronic feedback not only for the prescription writing, but as well for the monitoring of prescription 

compliance, as well. 

So these are important areas, important recommendations, and 

important areas of ongoing research to extend still further the possible application of information technology to the application of optimal therapies. 

Senator CARPER. Is there any role for the Congress with respect 

to this notion that Speaker Gingrich is suggesting? Is there something we ought to be doing or ought not to be doing? 

Hon. GINGRICH. Here I am a Theodore Roosevelt Republican. I 

believe the Federal Government has an absolute obligation to mandate safety in health standards. I like the idea that if I go to 

60

McDonald’s, I know that the water is drinkable and the beef is actually beef. I want the delivery system to be free market, but I 

want the rules of the game within which the delivery system competes to be established by the Government, which was the Theodore Roosevelt breakthrough with the Food and Drug Act, for example. 

I believe that the Medicare bill absolutely should have a very 

powerful section on patient safety. I believe that from the Administration for Healthcare Research and Quality, from the National 

Institutes of Health, from the Institute of Medicine, from the Food 

and Drug Administration, you can pull together a set of recommendations. 

I also believe that institutions like AARP would be very supportive of establishing a higher standard for the country on computerized order entry of drugs which will save a substantial number of lives, on electronic prescriptions, on a number of other steps 

that could be done. So that you could require, for example, that 

within three to five years every hospital in the country would either have an intensive onsite or an electronic intensive care unit. 

There is no question this saves lives. 

These are things that are not going to happen for a practical reason inside the current system. No hospital administrator can take 

on their doctors when their doctors are the primary source of the 

patients for their hospital. The system is just gridlocked today. 

In some cases, we ought to have Federal funding I would argue 

that the biological threat to this country is four times as great as 

the nuclear threat, and that we should have the equivalent of Eisenhower’s interstate highway system as an investment in Internet 

technology for biological survival in a real threat. 

In some places I would have the Federal Government involved. 

In rural areas, I would look at some things that need to be done 

differently. But on balance, this bill should not leave the House 

and Senate without a very strong patient safety component that includes these kind of breakthroughs. 

By the way, the best people I talk to believe this bill will actually 

cost less than the current system if you do it right. It will not cost 

more. Whether you can get CBO to score that it is argument I am 

having with CBO. But if you look at the scale of the breakthroughs, 

with comorbidity management, with electronic prescriptions, with 

computer order entry, with an electronic health record, this should 

be a substantially less expensive system than it is today. 

Senator CARPER. I was just wondering, Mr. Chairman, if we got 

a patient—and one of our witnesses talked about an elderly person—who may be seeing a variety of doctors, taking a multitude of 

prescription medicines or non-prescription medicines, whose job is 

it to oversee the entire regimen, the entire medical medication, if 

you will, that a person is taking? If you are seeing, again, a variety 

of physicians, taking a variety of medicine, whose job is it? 

I think you said if you deal with—talking about comorbidities— if you deal with the person in the totality, who is the you? 

Hon. GINGRICH. Lois Kwan, who is the head of a major subsidiary of United Health and one of the smartest health managers 

in the country, has testified and has worked with staffs on the Hill 

on comorbidity management, and absolutely believes—and she 

61

helped develop the Evercare model I described earlier, which literally currently saves the Federal Government money—improves 

the quality of life for senior citizens, and is stunningly effective. 

She absolutely believes you can build a system. In the end you 

want doctors and patients to be in charge, not bureaucrats. But you 

want to build systems that make that easy. You want to build incentives that make that easy. 

I think there is a growing belief that you could have an intelligent comorbidity management system that would again be part of 

an electronic health record. Because if you do not have that, you 

cannot make it work at a practical level. 

When my mother first went into long-term care, I was stunned 

to realize that she was taking, at one point, 17 different medications from three different doctors, none of whom looked at her total 

record. It was breathtaking. 

But CMS today does not design the incentive system, does not 

design the payments, does not design the structure. I think there 

is some obligation of Government to think through how you design 

the structure to empower the doctor and the patient to have this 

kind of intelligent capability. 

Senator CARPER. Mr. Chairman, I am reminded a little bit in this 

discussion with respect to comorbidity management of an earlier 

witness that we had before us on a similar subject, a closely related 

subject. I am reminded of some work that is being done within the 

Democratic Leadership Council on this issue, I think some very 

good work. 

I look for issues and ways that we can work together to face our 

challenges, and God knows, we have got a huge one with respect 

to health care costs and health care cost containment and better 

outcomes. 

I think that with issues like comorbidity management, electronic 

prescribing of drugs, electronic patient records, that is a field that 

is well worth mining. 

We have not been able to get into issues of privacy concerns, and 

I have heard some of those raised. I cannot stay longer, but I just 

would note for the record that I am encouraged by the conversation 

we have had here, Mr. Chairman. Somewhere along the line we 

need to have a further discussion on privacy. 

Thank you. Nice to see you. Nice to see you all. 

The CHAIRMAN. Dr. Boettke, I have one last question to ask of 

you. I could ask many more, we are running out of time this morning. 

But when we talk about longevity, we are not just concerned 

about making sure people live longer lives. In this country it is 

longer lives and a better life in that longer life. 

You talked about the comparatives you have looked at and a 

market-driven system, or if you will, a free system, open free enterprise system that tends to do that. What are the conclusion you 

draw? Why is this happening where it is not happening elsewhere? 

Dr. BOETTKE. Well, as our economic wealth increases, we end up 

by having a more array of choices in our life. We can live different 

types of life, each to our own in some sense. Our wealth enables 

us to engage in more leisure. If we look at how much leisure we 

can enjoy today versus how much leisure our ancestors, our grandVerDate 0ct 09 2002 10:41 Nov 18, 2003 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 C:\DOCS\89500.TXT SAGING1 PsN: JOYCE
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parents or what not could enjoy, look at various different technological innovations that have been driven by markets, say for example even the invention of the electric light which enabled people 

now to enjoy a personal life at home, work hours and what not, 

how much time we have to spend in order to generate a house, 

even given the rise in housing prices, the real amount of work that 

we have to expend now in order to purchase a house versus what 

our grandparents did. 

The market society has generated tremendous amounts of wealth 

which enable us to enjoy the fruits of a productive life. 

So as we get older, we also want to have more fruitful lives, more 

meaningful lives that we can live out. The wealth that is generated 

by a market society actually provides that for us. 

What I was going to say before was that I thought that a point 

that Mr. Gingrich raised before in his original comments about the 

Europeanization of America in certain public policy issues, that is 

when you go around the world you see problems with pensions, 

problems with health care, problems with unemployment. I would 

also add problems of environment in the transition economies and 

our developing economies. The very policies that a lot of these 

countries pursue are the things that do not allow them to fix those 

problems. 

The last thing that we should engage in is trying to engage in 

the Europeanization of the American system which would, in fact, 

exacerbate our problems with our health care system and our unemployment problem. 

So to conclude, I think that what we need to do is make sure 

that we follow smart public policies which free up individuals to 

bet on ideas, find the financing to bring those bets to life, and to 

allow our economy to grow. With that you will end up by having 

people be able to expend more of their money on leisure, on the environment, on living better lives as we extend our lives through 

these benefits of innovations. 

The CHAIRMAN. We think that is probably a pretty good thought 

to end this panel on. So thank you gentlemen, all very much for 

your participation today. Newt, I will look forward to getting a copy 

of that book. 

Hon. GINGRICH. This is yours. 

The CHAIRMAN. There it is. OK. Hand delivered, that is even better. 

Gentlemen, thank you. 

Thank you all much. We would ask our second panel to come forward, please. 

Newt, if we could get you to move to the back of the room, thank 

you, we will get our next two panelists up. 

Gentlemen, thank you very much for being with us today. You 

can see, by the tone of our first panel, some of the energy and the 

excitement that is going on out there. Of course, our great concern 

that as we craft public policy in these areas that we do it right so 

that we do not stifle any of that which is moving in the market 

today, and at the same accomplishes something that our society 

can afford. 

So with this second panel, Stephen Goss, Chief Actuary at the 

Social Security Administration. Stephen, we thank you for being 

63

with us and Dr. James Vaupel. Dr. Vaupel is Director of the Max 

Planck Institute of Demography in Germany and a senior researcher with the Terry Stanford Institute of Public Policy at Duke 

University. Doctor, thank you very much. 

Steve, we will turn to you first for your testimony. Thank you. 

STATEMENT OF STEPHEN C. GOSS, A.S.A., CHIEF ACTUARY, 

SOCIAL SECURITY ADMINISTRATION, BALTIMORE, MD 

Mr. GOSS. Thank you very much, Mr. Chairman. It is a pleasure 

to be with you today. 

During the last century, human longevity has literally exploded, 

as much as the world has become industrialized. Productivity and 

income rose to unprecedented levels, permitting vast improvements 

in the standard of living. Innovation in agriculture permitted adequate nutrition for whole populations. Innovation in engineering 

resulted in sanitary and safe living and working conditions. Innovation in medicine has resulted in immunizations and antibiotics 

that can be provided through primary medical care to all within 

these populations. 

In recent decades, Europe, North America, and Japan have experienced great increases in life expectancy at age 65, averaging 

nearly one year of increase per decade. Some countries have risen 

faster, most notably Japan, and some slower. 

The United States has been about average in this group, as you 

can see on the first chart. The average increase in the United 

States over the last three decades has been a little bit less than 

one year per decade. 

Each year the Social Security Trustees report to the Congress on 

the actuarial status of the Social Security Trust Funds. This assessment depends critically on assumptions about the future course 

of longevity in the United States, among other variables. 

How good have these projections been in recent years? The second chart indicates that the period life expectancies projected as of 

1983 and 1992 in these reports for the year 2000 were pretty accurate. If anything, projections in 1983 were little bit optimistic, 

slightly overstating the life expectancy for 2000, particularly for 

women. This is true both for life expectancy at birth and life expectancy at 65. 

For the future, mortality at higher ages is what we pay most attention to. Three-fourths of all deaths now occur in the United 

States at ages 65 and above. Chart 3 shows that in 1900 less than 

one-fifth of all deaths were at age 65 and over. Advances in infant 

mortality and reduction in mortality rates at ages below 65 have 

been dramatic during the past century. 

Rates of improvement in mortality for the total population, men 

and women combined, is shown in chart 6. In the interest of time, 

I will not talk much about charts 4 and 5 above, for men and 

women separately. 

The average annual decline between 1900 and 2000 for the age 

group 65 and over of a little over seven-tenths of one percent is 

about twice as large as experienced during the most recent 18 

years of this period in the United States. 

Going forward, we believe that achieving mortality improvement 

for the aged at about the same rate as we averaged for the entirety 

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of the last century is reasonable. This will be no small assumption 

to achieve. Matching the accomplishments of the last century, including with the pure positive effects of improved sanitation, nutrition, medical accessibility for all will not be easy. AIDS, SARS, antibiotic resistant microbes, along with increasing obesity and declining levels of exercise in the United States remind us that mortality improvement will not be automatic. There are forces that operate in the opposite direction. 

For ages under 65, there is some agreement that mortality declines will diminish, the rate of decline will diminish from the level 

of the last century. The 1999 technical panel appointed by the Social Security Advisory Board endorsed the trustees’ pattern of relative rates of improvement by age group. Moreover, the rate of improvement has diminished for this age group, under 65, through 

the last century, with slower average rates for the last 50 years 

and for the last 18 year period. 

Implications for the cost of social insurance, Social Security as 

well as Medicare are substantial Social Security benefits are indexed to reflect the average wage growth and price inflation and 

thus, are relatively insensitive to variation in these parameters. 

However, there are no automatic adjustments in the Social Security program for changes in demographic parameters. 

The drop in the United States birth rate that started in the 

1960’s will increase the aged dependency ratio, shown in chart 7, 

between 2010 and 2030. Continued increase in this ratio after 2030 

reflects the more subtle but steady effects of increasing longevity. 

Increases in this ratio of aged population to working age population translate directly to increases in the number of Social Security beneficiaries per worker covered under the system, shown in 

chart 8, and the program costs expressed as a percentage of the 

taxable payroll, shown in chart 9. 

Continued increases in human longevity will require change for 

the Social Security program. We have known this truth for many 

decades. It was even evident in the projections developed and presented in the 1983 Trustees’ Report to Congress that was produced 

right after enactment of the last major Social Security reform legislation. 

How quickly longevity will increase is a subject we will continue 

to debate and observe. The trustees’ track record over the last 20 

years has been pretty good. We believe that the current assumption 

of a return to the remarkable rate of longevity increase experienced 

during the 20th century as a whole for aged Americans provides a 

sound basis for assessing the actuarial status of the Social Security 

program. 

Thank you again for the opportunity to come today and I look 

forward to your comments and questions. 

[The prepared statement of Mr. Goss follows:]

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The CHAIRMAN. Steve, thank you. It is Goss, is that correct? 

Mr. GOSS. That is correct. 

The CHAIRMAN. I apologize. 

Doctor, welcome. 

STATEMENT OF JAMES VAUPEL, Ph.D., DIRECTOR, MAX 

PLANCK INSTITUTE FOR DEMOGRAPHIC RESEARCH, 

ROSTOCK, GERMANY 

Dr. VAUPEL. Mr. Chairman, is life expectancy approaching its 

limits? Many believe it is, but the evidence suggests otherwise. 

Consider an astonishing fact: life expectancy in the record holding country has risen for 160 years at a steady pace of three 

months per year. In 1840 the record was held by Swedish women, 

who lived 45 years on average. Today, along nations, the longest 

expectation of life, just over 85 years, is enjoyed by Japanese 

women. There is no evidence of any slowing of this long-term rise 

in best practice life expectancy. 

From 1900 to 1950, life expectancy increased rapidly in the 

United States, as Steve Goss mentioned. At mid-century, U.S. life 

expectancy was only a few months less than the highest life expectancy anywhere in the world. As recently as 1979, the U.S. disadvantage was only two years. Among people 80 years old and 

older, survival was better in the United States than anywhere else, 

a lead the United States held until 1992. 

But health progress in the United States has slowed, especially 

over the past decade or two. Other countries have caught up and 

surpassed us. Today, U.S. life expectancy at birth almost is 6 years 

behind the record. In many countries, including Japan and France, 

people of all ages, from the very young to the very old, enjoy better 

survival chances than in the United States. The United States is 

the world’s leader in so many things that it is surprising and disturbing that the U.S. has fallen so far behind in the matter of life 

itself. 

The Social Security Administration forecasts that improvements 

in U.S. life expectancy will continue to be very slow. This implies 

that the life expectancy gap between the United States and Japan, 

between the United States and France, between the United States 

and almost all other advanced countries in the world will continue 

to widen by one or two months per year. 

Consider the situation in 2050. A half-century may sound distant, but a majority of the people currently living in the United 

States will still be alive then. The Social Security Administration’s 

latest forecast, the 2003 forecast, is that female life expectancy in 

the United States will gradually rise from 79.5 years today to 83.4 

years in 2050. This level, half a century from today, is less than 

current female life expectancy in Japan and in France and in many 

other countries. It is 13 or 14 years less than likely Japanese and 

French female life expectancy in 2050. 

The prediction for France and Japan and other countries is uncertain, but most of the uncertainty is on the upside. Breakthroughs in biomedical research could lead to even higher life 

expectancies, as the speakers on the previous panel emphasized. 

There is an enormous contrast between the optimism of the preVerDate 0ct 09 2002 10:41 Nov 18, 2003 Jkt 000000 PO 00000 Frm 00075 Fmt 6633 Sfmt 6633 C:\DOCS\89500.TXT SAGING1 PsN: JOYCE
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vious panel and the pessimism of the Social Security Administration. 

Is it realistic to assume that the United States will fail to catch 

up in half a century with expectations of life already exceeded in 

Japan and France? Is it realistic to assume that the United States 

will fall more than a decade behind Japan and France? 

Market economies around the world are tightly interconnected. 

Research ideas and innovations quickly spring across national 

boundaries by the Internet, as was discussed earlier. The United 

States will, I am confident, reduce the health disparities, implement the health care and health promoting innovations, and make 

the research investments needed to halt the widening life expectancy gap and then to reduce it. 

A crucial first step is to figure out why the United States is falling further and further behind. There are guesses and there are assertions, but there are no persuasive findings. This is something 

that the Social Security Administration should be worrying about. 

This is something that the National Institute on Aging should be 

funding more research on. A larger concerted, and more focused effort is needed on why the United States is falling further and further behind other countries in life expectancy. 

Many people believe that little or nothing can be done about 

health at older ages. This is nonsense. Mortality and many kinds 

of morbidity at older ages have declined remarkably over the past 

half-century. 

East Germany, where I now live, offers a dramatic example of 

how much can be done to improve the health of the elderly. Under 

Communist rule, older East Germans suffered poor health and 

short lives. Today, a mere decade after the fall of communism, 

older East Germans enjoy the same high level of health and longevity as West Germans. In one decade. The number of centenarians over this decade has tripled. These people were around 90 

years old when communism fell. But even at their advanced age, 

they were able to benefit from a Western economy and health care 

system. 

In sum, given intelligent economic and social policy and continued investment in research, longevity and healthy longevity will increase in the coming decades. This is not a problem; it is a great 

achievement. But it will result in challenges for policymakers, especially concerning Social Security. 

Thank you. 

[The prepared statement of Mr. Vaupel follows:]

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The CHAIRMAN. Thank you, Doctor. Gentlemen, thank you. 

What do I say? Maybe I say it this way, both of you have two 

substantially different points of view as it relates to projection of 

U.S. longevity. So at the risk of starting a gentlemanly argument, 

let me ask each of you to identify the limitations of your colleague’s 

evaluations. Steve? 

Mr. GOSS. Thank you, very much. 

First of all, I would like to characterize the difference in our 

views as not being one of optimistic versus pessimistic, but of being 

optimistic and more optimistic. 

The CHAIRMAN. That is another way of putting it, yes. 

Mr. GOSS. A continuation of the rate of improvement in mortality 

at age 65 and over into the next century at rates that were experienced on average during the past century, is optimistic, and perhaps even bold. It is dramatic. 

The CHAIRMAN. I am fairly optimistic about those rates, on behalf of myself. I do not want to move to Japan or change gender. 

Mr. GOSS. But I think it is important to keep in mind the kinds 

of changes that occurred during the past century, the pure positive 

effects that they had. 

The optimism that we had on the prior panel about some of the 

science and technological changes that we will have in the future 

is real. The question on those changes is the rapidity with which 

those will be realized, they will be developed, and they will be able 

to be brought to the population as a whole, and to the extent to 

which they will be pure positive effects on our population and its 

longevity versus effects that will have some good points and some 

bad points. 

Improved nutrition, improved public safety, better drinking 

water, better sanitary conditions have no downsides. Many technological breakthroughs may have some downsides, and it may take 

us decades to bring them to the population as a whole. 

But what I would like to do in answer to your question is address 

a couple of technical points about Jim’s very, very creative and very 

insightful description of the chart included in his handout. 

This idea of looking at the best nations’ practice over about the 

last 150 years is very intriguing. However, there are a couple of 

technical points that are worthy of consideration. During a fairly 

substantial portion of this period, between 1880 and just short of 

1940, the points on the curve which are shown in Jim’s more expanded technical article were the result of data from one particular 

area of the world which, in fact, was not even really a complete national population. It was a portion of New Zealand, if I recall correctly. There is a very long period of almost 60 years in which 

maintaining this linear pattern is dependent upon the data from 

that area. 

Some demographers we have talked to have suggested that if you 

did not have that portion of New Zealand supporting the linear 

trend during that fairly long period, and you had some lower numbers for some of the other countries, you would, in fact, uncover a 

trend that showed relatively slower improvement in best nation 

mortality in the latter portion of the last century and the early portion of this century. Then we would see the sudden explosion in the 

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rate of improvement in mortality during the first portion to the 

middle portion of this century. 

It would also suggest that this curve, rather than being a line 

that might extend indefinitely, would be a line that had a more 

gradual slope for a while, then went up very rapidly in the middle 

portion of this century, and may be moving toward the shape of an 

s-curve with a little bit of a flattening toward the end of the last 

century. 

I think this is a very possible scenario and many demographers 

believe that that may be really where we are headed. 

The other technical aspect that I would suggest on this is a different possible interpretation, which I think has just as much 

chance of being valid. That is that there is differentiation amongst 

nations on the basis of lifestyle, diet, the nature of populations, in 

terms of the potential longevity that they might have, given access 

to what is currently available in medical technology and other technologies. I think this is fairly evident. 

Right now the United States, many European countries, and 

Japan have reasonably well accessed most of what is available in 

terms of technologies, and yet we have quite a large difference in 

longevity. So there really are some differences that are not immutable, but some fairly strong differences amongst nations based on 

lifestyle and diet and other aspects of the population. 

That being the case, when we look at this progression of best nation achievement of mortality, the sequencing through time of 

which nations have availed themselves of the current state of technology is really critical. 

Japan, it might be argued—and people from Japan believe that 

this is perhaps the case because of the nature of their lifestyle, 

multigenerational families instead of people going to nursing 

homes, for example—believe that there are probably some inherent 

advantages that Japan has over some of the other countries listed 

in this progression. The fact that Japan, post-World War II, only 

in that timeframe began to avail itself of many of the technologies 

that other countries had availed themselves of earlier may explain 

why Japan has risen to the level it is at only recently. 

The data we have seen suggest that in the last 10 or 20 years—

and I think Jim would concur with this—there has been some deceleration in Japan, and likely there will be some more in the future. 

So my suggestion is that we should be cautious in over interpreting this progression of a sequence of nations. This is not a single population or a single nation we are looking at, a trajectory, but 

really just a growth rate that has occurred by piecing together a 

number of nations which have very different characteristics. 

The CHAIRMAN. Doctor? 

Dr. VAUPEL. Let me respond to that. 

First of all, let me say that I have the highest respect for Steve 

Goss, who is a really excellent actuary, but I disagree with him and 

I think some of his facts are incorrect. 

First of all, matching the accomplishments of the last century is 

not what the previous panel talked about. The previous panel 

talked about the accomplishments of the last century being 

matched in 20 to 25 years. I think that is much more realistic. 

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Second, matching the accomplishments of the past century is not 

a very high aspiration when it comes to reducing death rates for 

elderly people. Mortality fell in the first part of the last century because of reduction in infant and child mortality. Only in the last 

part of the less century, in fact only in the last 30 years, have 

death rates started to fall rapidly for older people, in part because 

of the research that is being done on aging. 

So matching the accomplishments of the last century in terms of 

older people is not a high aspiration. It is certainly not a high aspiration compared with the 20 to 25 years of the last panel. 

Second, Steve is factually incorrect about the straight line that 

I show of life expectancy increase. In the Science Magazine article 

we point out, and have in the appendix, a diagram saying that if 

you look at the second best country you would have the same pattern. If you look at the third best country you would have the same 

pattern. If New Zealand never existed, you have the same pattern. 

In fact, if Japan never existed you would have a very similar pattern in recent years. This is not some outlier that is driving the 

whole curve. This is the rate of improvement in the countries that 

are doing best. 

Third, we do not have to make any forecasts to be concerned. We 

can look at historical facts. The historical facts are the United 

States is falling behind. There is no arguing about that. 

In 1979, the U.S. life expectancy—— The CHAIRMAN. Do you both agree on that point? 

Dr. VAUPEL. Right, there is no argument. The United States is 

falling behind. 

Mr. GOSS. That is true, but I would suggest that, the United 

States is not alone in that regard. It may be a question not so 

much of—— The CHAIRMAN. I will let you pursue that when he completes his 

thought. 

Dr. VAUPEL. The United States is falling behind. We were two 

years behind the record in 1979. We were close to the record in 

1950, two years behind in 1979. We are six years behind today. 

This is not because—I mean, the life expectancy in the United 

States is partly due to mortality at younger ages. But our falling 

behind is largely due to the fact that we are making very little 

progress at older ages. 

In fact, I will give you an amazing fact. Native-born white females, you do not ordinarily think of them as a disadvantaged 

group, but for native-born white females, there has been no improvement in mortality for this group in 20 years, at older ages. 

Life expectancy at age 80, for example, for this group is identical 

to what it was in 1982, 20 years ago. 

So the United States is falling behind at older ages. The Social 

Security Administration assumes the United States is not going to 

catch up, the gap is going to continue. I do not see any logic behind 

that. 

Mr. GOSS. I would like to suggest that one way of looking at this 

is the United States has been falling behind, and it certainly has. 

But another way of looking at this is that many other nations, for 

instance Japan, that may have certain advantages in terms of the 

lifestyle and diet, have simply been asserting themselves and movVerDate 0ct 09 2002 10:41 Nov 18, 2003 Jkt 000000 PO 00000 Frm 00082 Fmt 6633 Sfmt 6633 C:\DOCS\89500.TXT SAGING1 PsN: JOYCE
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ing ahead to positions in terms of life expectancy which perhaps 

are appropriate and should be expected. I do not think that we can 

expect homogeneity across all nations, in terms of life expectancy. 

I could not agree more with Jim that the last 20 years have been 

very, very bad. In fact, shown right on our charts, which are not 

up there now but which you have in the handout, on our chart 

number 5, you will see exactly what Jim was talking about. 

Mortality improvement for females over the last 18 years has been 

zero. This is why we have, in fact, rejected the rate of improvement 

in mortality over the last 20 years and have looked at much longer 

periods, as has been suggested by a number of other demographers 

like Ron Lee. 

Is it possible that we will, in fact, have much faster rates of improvement than suggested in the trustees’ intermediate assumptions? Absolutely. We have alternative assumptions that incorporate this. 

But I would suggest one other point, that the prior panel was 

talking about having, perhaps in the next 25 years, the possibility 

of technological and medical advances that would rival what we 

had for the entire past century. That certainly is possible. It is also 

possible that we will not have the ability to bring these breakthroughs fully to the whole population or to afford bringing them 

to the whole population. 

The other point we have to keep very much in mind is that technological breakthroughs and medicine are not the whole story of 

the last century. Even if we do achieve the impact of medical technology breakthroughs that we had in the last century entirely in 

the next 25 years, there are so many other things like the improvement in nutrition and sanitary conditions that had major impacts 

in the last century, especially in the first half of the last century 

for the United States that would also need to be duplicated in order 

to even match the rate of improvement during the next century. 

We are optimistic. Some are more optimistic, obviously. But I 

think the numbers that the trustees have, which have actually 

been increased fairly substantially in the last five years in their 

projections, are reasonable. I am not sure Jim would contend that. 

I would also not contend with him that there is a very distinct 

possibility that improvement might be substantially faster. 

The CHAIRMAN. Well, Dr. Vaupel suggests that officials responsible for health and social policies believe that life expectancy is approaching its limits. Do the folks over at the Social Security agree? 

Do the trustees, are they one of those institutions that agrees with 

that figure? 

Mr. GOSS. Absolutely not and fortunately, Jim clarified that 

point for me when we were talking before the hearing started. I 

think he was referring perhaps to officials in some other countries. 

As Jim is well aware, and a lot of people are in this room, the 

trustees have now for decades been projecting continued mortality 

improvement indefinitely into the future. We have never, ever assumed or projected that there is a limit to the maximum life expectancy that we would be approaching. 

The CHAIRMAN. Did I misstate your comment in relation to that 

question? Would you like to clarify that? 

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Dr. VAUPEL. Steve Goss is absolutely correct, that many countries and many agencies that do forecasting, including the United 

Nations, assume some limit. But the Social Security Administration does not. The Social Security Administration assumes a very 

slow increase. No limit, but a slow increase. 

The CHAIRMAN. You talk about the United States falling behind 

based on your observations. There has been some comment about 

why this gap might exist. Are there any other conclusions drawn 

as to what attributes to the gap? 

Dr. VAUPEL. Mr. Chairman, as a demographer, I am very embarrassed to tell you that I do not know what is causing this gap. I 

am actually deeply grateful to have been invited by you to testify 

today, because it started me to think about this. 

I previously had known about this but had not thought about it. 

I was afraid that you might ask me what is the cause of this increasing gap, so I tried to do some research to find out if anybody 

had done any persuasive fact-finding about this. There is really 

very little information. 

The fact that I gave you before just astonished me, that nativeborn white females have made no progress in 20 years, despite the 

fact that we have a very good medical care system in this country, 

a very expensive medical care system, as you mentioned before because of Medicare and Medicaid and other Federal programs and 

State programs. There is universal access. 

We should be doing very well. You might think of reasons why 

immigrants or males or minority groups might not be doing so well, 

but they are actually doing better than native-born white females. 

It is a real mystery. 

The National Institute on Aging, the Social Security Administration, the community of demographers should really start worrying 

about this. What is going on? What is happening when the United 

States is doing so well on so many fronts but it is falling further 

and further behind on this critically important—you know, life 

itself, it is falling further and further behind. 

The CHAIRMAN. Do you wish to make any comment on that? 

Mr. GOSS. I agree with Jim completely, that we absolutely wish 

we knew more about this and had definitive answers. There have 

been suggestions of the possibility that female mortality has improved more slowly over the last 20 years, perhaps because women 

have increased the extent to which they are smoking, in absolute 

terms and relative to men, that women have been getting involved 

in behaviors in the workplace more to the extent that men have 

and perhaps have been exposing themselves to more risks and 

more stress. 

The CHAIRMAN. I have read articles on that, and that argument 

is placed. 

Mr. GOSS. There may be validity to that and there may not. We 

really do not have definitive answers as of yet. 

The CHAIRMAN. Doctor, you made observation, living in East Germany, that East Germans had rapidly caught up with West Germans as it relates to longevity. This is a little outside where this 

committee is going, but I am curious because looking at the other 

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ists talk about those relationships. The Soviet Union, moving into 

a more market-oriented economy, and yet it has not improved the 

longevity of its citizenry. 

I think the answer is obvious to me, but I would like to hear 

from you. Is it because the East Germans had the opportunity to 

immediately associate with the health care system from West Germany and incorporate that into a whole government, if you will, 

and a whole system and a whole health care delivery program? 

Whereas Russia has not? 

Dr. VAUPEL. I think both factors have played a role. Following 

reunification, the West German health care system was extended 

to East Germany. Nursing homes were established. There had not 

been nursing homes before, there had been hospital wards for older 

people. This made a big difference. Modern medicine was available. 

A system whereby the government helped pay for medical care and 

medicine was implemented. 

But in addition, the older people in East Germany started to receive West German pensions. Older people in East Germany started to be able to buy fresh fruits and vegetables. 

The CHAIRMAN. So it was a matter of income. 

Dr. VAUPEL. There was a higher income. There was a market 

economy that was established that let older people buy the things 

that they wanted and needed that made life better for them, that 

let them eat better, let them live better, let them heat their houses 

better, and so on. 

So I think it is a mixture of both economic progress and a better 

medical system. 

The CHAIRMAN. Thank you Gentlemen, thank you very much for 

your testimony this morning. I think it is extremely valuable for 

the record and for what we are attempting to build here in this 

committee for Congress to look at. 

We do appreciate it. It is a fascinating topic that we better understand reasonably well, based on how we are trying to shape 

public policy and public programs at this moment. Failure to recognize it or misjudge it can be either expensive or certainly troublesome and a problem for our country. 

We thank you very much and the committee will stand adjourned 

[Whereupon, at 11:40 p.m., the committee was adjourned.]

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