Obamacare's Cost Scalpel

One often-heard criticism of the health-care reform legislation that President Barack Obama has now signed into law is that it won't do enough to rein in the cost of treatment. U.S. medical spending has soared to $2.5 trillion per year (a price tag that has more than doubled in 15 years) and represents 18% of the nation's gross domestic product. Can Obamacare begin to cope with that?

The answer is a qualified yes. Tucked inside the 2,400-page bill is an item (it's right there on page 1,617) that has generated far less attention and political heat than other parts of the White House's plan to expand medical coverage to 32 million uninsured Americans. The measure requires the U.S. to put aside $500 million or more a year for something called "comparative effectiveness research," an ungainly name for a process Obama hopes will reduce costs. The studies, designed to show which drugs, devices, and medical treatments work best, could have an enormous impact on the delivery of health care in the years ahead, scrutinizing everything from cholesterol drugs and heart stents to hospital procedures.