Citing Affair, Petraeus Resigns as C.I.A. Director

The sudden development came just days after President Obama won re-election to a second term. Mr. Petraeus, a highly decorated general who had led the wars in Iraq and Afghanistan, had been expected to remain in the president’s administration.

Instead, Mr. Petraeus said in the statement that the president accepted his resignation on Friday after he had informed him of his indiscretion a day earlier.

“After being married for over 37 years, I showed extremely poor judgment by engaging in an extramarital affair,” Mr. Petraeus wrote. “Such behavior is unacceptable, both as a husband and as the leader of an organization such as ours. This afternoon, the president graciously accepted my resignation.”

Mr. Obama released a statement praising Mr. Petraeus for his “extraordinary service” to the country and saying that Michael J. Morell, the deputy director of the C.I.A., would take over once again as acting director. He served in that position briefly after Leon E. Panetta left the agency last year.

“By any measure, through his lifetime of service, David Petraeus has made our country safer and stronger,” the president said. Without directly addressing the affair, Mr. Obama added: “Going forward, my thoughts and prayers are with Dave and Holly Petraeus, who has done so much to help military families through her own work. I wish them the very best at this difficult time.” Ms. Petraeus is the assistant director of the Office of Servicemember Affairs at the Consumer Financial Protection Bureau.

The development came as a shock to the national security establishment. In a statement, James R. Clapper, the director of national intelligence, called the decision “a loss” to the country.

“Dave’s decision to step down represents the loss of one of our nation’s most respected public servants.” Mr. Clapper wrote. “From his long, illustrious Army career to his leadership at the helm of C.I.A., Dave has redefined what it means to serve and sacrifice for one’s country.”

By acknowleding an extramarital affair, Mr. Petraeus, 60, was confronting a sensitive issue for a spy chief. Intelligence agencies are often concerned about the possibility that agents who engage in such behavior could be blackmailed for information.

In his statement, Mr. Petraeus did not provide any details about his behavior, saying that he asked the president to be allowed “for personal reasons” to resign.

Mr. Petraeus praised his colleagues at the C.I.A.’s headquarters in Langley, Va., calling them “truly exceptional in every regard” and thanking them for their service to the country. He made it clear that his departure was not how he had envisioned ending a storied career in the military and in intelligence.

“Teddy Roosevelt once observed that life’s greatest gift is the opportunity to work hard at work worth doing,” he said. “I will always treasure my opportunity to have done that with you, and I will always regret the circumstances that brought that work with you to an end.”

Over the last several years, Mr. Petraeus had become one of the most recognizable military officials, serving as the public face of the war effort in Congress and on television.

Under President George W. Bush, Mr. Petraeus was credited for helping to develop and put in place the “surge” in troops in Iraq that helped wind down the war in that country. Mr. Petraeus was moved to Afghanistan in 2010 after Mr. Obama fired General Stanley H. McChrystal over comments he made to a magazine reporter.

In Afghanistan, Mr. Petraeus led the push for a similar increase in troops ordered by Mr. Obama, but he was unable to replicate the success he had in the Iraq conflict.

Last year, Mr. Obama persuaded Mr. Petraeus to leave the Army after 37 years to lead the C.I.A., succeeding Mr. Panetta, who moved to the Defense Department.

This article has been revised to reflect the following correction:

Correction: November 9, 2012

An earlier version of this article incorrectly stated that David H. Petraeus was expected to remain in President Obama’s cabinet. The C.I.A. director is not a cabinet member in the Obama administration.

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Groupon Earnings Miss Expectations on Weakness in Europe

SAN FRANCISCO (Reuters) — Groupon reported financial results late Thursday that fell short of Wall Street’s already cautious expectations, as the daily-deal company failed to turn around its struggling European business.

Groupon also confirmed that it had laid off about 80 employees, mainly in sales, as part of an effort to automate the way it handles its deals.

The company’s shares fell as low as $3.21 in after-hours trading, down as much as 18 percent from their closing price of $3.92. Groupon was the darling of investors during last year’s consumer dot-com boom in initial public offerings, but now it has shed more than 80 percent of its value since making its public debut at $20 a share.

Wall Street has grown uneasy about Groupon’s prospects as daily-deals fever wanes among consumers and merchants, and as growth rates sputter. Adding to the difficulties, the S.E.C. has been looking into Groupon’s accounting and disclosures, an area of controversy during its initial public offering.

Groupon reported third-quarter revenue of $568.6 million, compared with $430.2 million a year earlier. Analysts had expected revenue of $590 million, according to Thomson Reuters.

The company posted a quarterly net loss of $3 million, or break-even on a per-share basis, compared with a net loss of $54.2 million, or 18 cents a share, in the third quarter of 2011.

Andrew Mason, chief executive of Groupon, said a “solid performance” in North America was offset by weakness in Europe. International revenue, including Europe, grew 3 percent to $277 million; North American revenue surged 80 percent to $292 million.

Europe has been a particular problem for Groupon, partly because the sovereign debt crisis there has hurt demand for higher-price deals. Groupon was also offering steeper discounts, disappointing some merchants.

Read More..

Advertising: Help Remedies Tries to Cure Ailments in Small Doses

DISAPPOINTED voters, runners with blisters and headache sufferers alike are getting some unexpected relief from a pop-up pharmacy that opened this week in the nation’s capital.

The “help shop,” which offers low-dose drugs for everyday woes, is the idea of Help Remedies, a start-up company that sells minimalist white packets directed at single medical issues like nausea, headache or insomnia.

The company, the collaboration of two marketers, is creating quirky scenes including a high-heel wearing model walking on a treadmill to market its “Help, I have a blister” packet of bandages, or a performer sleeping in a store window to drum up interest for its “Help, I can’t sleep” caplets.

This week, shoppers and passers-by attracted by the napper, for example, could go inside the temporary pharmacy to investigate its 10 over-the-counter remedies for conditions like body aches and allergies.

The store’s team fanned out to polling stations on Tuesday to hand out its headache packets, and then on Wednesday to the nearby Republican National Committee to share nausea relief. Their marketing may be seen as fun and zany, but the company founders, Richard Fine and Nathan Frank, say they have a serious message.

“We want people to see that there are simple solutions,” said Mr. Fine, who said his straightforward approach was influenced by his parents, who are medical professors specializing in epidemiology.

“Most people shop by brand or product, and it’s difficult to know what you should be buying and taking,” he said. “It is a confusing space for people who are not experts.”

Mr. Fine and Mr. Frank, who met while working in branding and advertising, decided to try to streamline what they see as an antiquated and cluttered pharmaceutical market.

“We wanted to take what’s basic and works, and make it human,” Mr. Fine said. Their strategy of providing single ingredients in low dosages is aimed at basic medical conditions that do not require hospitalization.

After starting the company in 2008, they consulted pharmaceutical sources to zero in on the drugs and dosages to use. Their “Help, I have a headache” formulation, for example, contains 325 milligrams of acetaminophen per caplet.

“That is less than the amount in an extra strength caplet,” said Mr. Fine. “If you need more, you can take more. But this is what pharmacists recommend.”

By that summer, Help Remedies was distributing its packets in some high-end hotel chains and business conferences. In 2009, the two men quit their jobs and started the company Web site, helpineedhelp.com, which includes a link to drug facts for each product.

To carve a niche in the crowded pharmaceutical market, Mr. Frank, who handles the company’s creative efforts, said he focused on offbeat marketing, including tactile packaging and performance windows, and viral videos that mixed up the serious, the absurd and even the goofy.

For the packaging, Mr. Frank settled on a flat, white, textured box that opens like a tin. Taking a page from product designers like Apple, he settled on a simple font called century schoolbook, in various colors.

The graphic work was originally done by ChappsMalina and Little Fury, design firms in New York, and was since updated by another firm, Pearlfisher.

Help Remedies, a privately held company, did not disclose its advertising spending, which was $400 in 2010 and $12,500 last year, according to figures from Kantar Media, a WPP unit.

With a small budget, the company has focused on spinning out lighthearted solutions to situations — like countering boredom by focusing on a bouncing ball or hangovers by staring at a rag — on its Web site, videos, bus shelters and other advertising and in the store windows of Ricky’s, a New York beauty supply company.

Help Remedies set up “living windows” like “Help, I’ve never been kissed,” with models on hand to give hugs and kisses in Ricky’s storefronts. There were also serious problems like “Help, I want to save a life,” that provided registration kits from the bone marrow donor center DKMS.

To expand, the company is adapting the living window approach to its first pop-up pharmacy, in Washington, which was delayed by Hurricane Sandy and got under way as the election results were unfolding.

In addition to giving “Help, I have a headache” packets to anyone who asked, the store manager, Melinda Welch, and her staff distributed 2,000 packets — for blisters and for body aches — to participants in the annual High Heel Race.

The company’s products are found in major pharmacy outlets like Duane Reade and CVS, as well as Target and Walgreens. Last year, the company reached $4 million in sales and is set to expand after Washington to San Francisco; Seattle; Portland, Ore.; Austin, Tex.; Chicago; and Miami.

As part of its expansion, the Washington store plans to hold a “Help, I am Insecure” event on Saturday with a life coach to provide support and advice, and a manicurist for those insecure about their nails, Ms. Welch said.

Other events at later dates include “Help, I am Lonely,” with an online dating site consultation, and “Help, I’m in an Argument with my Spouse,” with a relationship judge to settle differences.

William G. Daddi, the president of Daddi Brand Communications, said Help Remedies’s distinct packaging was well suited to compete in the crowded health and beauty market.

But he warned that tying so many products to whimsical marketing carried risks because “there will be consumer confusion and the remedies will be seen as novelty products.”

“To build a true brand, the consumer needs to see that the product is effective,” Mr. Daddi said. “There needs to be a link to tangible outcomes so people see that the product works.”

Read More..

Advertising: Help Remedies Tries to Cure Ailments in Small Doses

DISAPPOINTED voters, runners with blisters and headache sufferers alike are getting some unexpected relief from a pop-up pharmacy that opened this week in the nation’s capital.

The “help shop,” which offers low-dose drugs for everyday woes, is the idea of Help Remedies, a start-up company that sells minimalist white packets directed at single medical issues like nausea, headache or insomnia.

The company, the collaboration of two marketers, is creating quirky scenes including a high-heel wearing model walking on a treadmill to market its “Help, I have a blister” packet of bandages, or a performer sleeping in a store window to drum up interest for its “Help, I can’t sleep” caplets.

This week, shoppers and passers-by attracted by the napper, for example, could go inside the temporary pharmacy to investigate its 10 over-the-counter remedies for conditions like body aches and allergies.

The store’s team fanned out to polling stations on Tuesday to hand out its headache packets, and then on Wednesday to the nearby Republican National Committee to share nausea relief. Their marketing may be seen as fun and zany, but the company founders, Richard Fine and Nathan Frank, say they have a serious message.

“We want people to see that there are simple solutions,” said Mr. Fine, who said his straightforward approach was influenced by his parents, who are medical professors specializing in epidemiology.

“Most people shop by brand or product, and it’s difficult to know what you should be buying and taking,” he said. “It is a confusing space for people who are not experts.”

Mr. Fine and Mr. Frank, who met while working in branding and advertising, decided to try to streamline what they see as an antiquated and cluttered pharmaceutical market.

“We wanted to take what’s basic and works, and make it human,” Mr. Fine said. Their strategy of providing single ingredients in low dosages is aimed at basic medical conditions that do not require hospitalization.

After starting the company in 2008, they consulted pharmaceutical sources to zero in on the drugs and dosages to use. Their “Help, I have a headache” formulation, for example, contains 325 milligrams of acetaminophen per caplet.

“That is less than the amount in an extra strength caplet,” said Mr. Fine. “If you need more, you can take more. But this is what pharmacists recommend.”

By that summer, Help Remedies was distributing its packets in some high-end hotel chains and business conferences. In 2009, the two men quit their jobs and started the company Web site, helpineedhelp.com, which includes a link to drug facts for each product.

To carve a niche in the crowded pharmaceutical market, Mr. Frank, who handles the company’s creative efforts, said he focused on offbeat marketing, including tactile packaging and performance windows, and viral videos that mixed up the serious, the absurd and even the goofy.

For the packaging, Mr. Frank settled on a flat, white, textured box that opens like a tin. Taking a page from product designers like Apple, he settled on a simple font called century schoolbook, in various colors.

The graphic work was originally done by ChappsMalina and Little Fury, design firms in New York, and was since updated by another firm, Pearlfisher.

Help Remedies, a privately held company, did not disclose its advertising spending, which was $400 in 2010 and $12,500 last year, according to figures from Kantar Media, a WPP unit.

With a small budget, the company has focused on spinning out lighthearted solutions to situations — like countering boredom by focusing on a bouncing ball or hangovers by staring at a rag — on its Web site, videos, bus shelters and other advertising and in the store windows of Ricky’s, a New York beauty supply company.

Help Remedies set up “living windows” like “Help, I’ve never been kissed,” with models on hand to give hugs and kisses in Ricky’s storefronts. There were also serious problems like “Help, I want to save a life,” that provided registration kits from the bone marrow donor center DKMS.

To expand, the company is adapting the living window approach to its first pop-up pharmacy, in Washington, which was delayed by Hurricane Sandy and got under way as the election results were unfolding.

In addition to giving “Help, I have a headache” packets to anyone who asked, the store manager, Melinda Welch, and her staff distributed 2,000 packets — for blisters and for body aches — to participants in the annual High Heel Race.

The company’s products are found in major pharmacy outlets like Duane Reade and CVS, as well as Target and Walgreens. Last year, the company reached $4 million in sales and is set to expand after Washington to San Francisco; Seattle; Portland, Ore.; Austin, Tex.; Chicago; and Miami.

As part of its expansion, the Washington store plans to hold a “Help, I am Insecure” event on Saturday with a life coach to provide support and advice, and a manicurist for those insecure about their nails, Ms. Welch said.

Other events at later dates include “Help, I am Lonely,” with an online dating site consultation, and “Help, I’m in an Argument with my Spouse,” with a relationship judge to settle differences.

William G. Daddi, the president of Daddi Brand Communications, said Help Remedies’s distinct packaging was well suited to compete in the crowded health and beauty market.

But he warned that tying so many products to whimsical marketing carried risks because “there will be consumer confusion and the remedies will be seen as novelty products.”

“To build a true brand, the consumer needs to see that the product is effective,” Mr. Daddi said. “There needs to be a link to tangible outcomes so people see that the product works.”

Read More..

Your Money: After the Storm: Managing Your Homeowner’s Claim

Tom Mihalek/Reuters

Mark Baronowski shoveled sand from the living room of a beach front property in Bay Head, N.J., last week. Many victims of Hurricane Sandy are novices when it comes to catastrophic insurance claims.

There is a sort of honeymoon period that occurs after a big storm like Hurricane Sandy, when insurance executives appear on the local news offering reassuring words. Their brightly painted vans pull into residential neighborhoods amid the standing water and debris. Everyone is hopeful. Handshakes and back-patting all around.

That period is about to end. Prices for roofers and construction materials will rise, disadvantageous parsing of policy language will commence and gangs of class-action lawyers will round up aggrieved clients who still have months of homelessness ahead of them. Many claims will take years to settle.

It happens every time, and so it will with this storm. That’s not to say that a majority of people with insurance claims won’t be satisfied with the check they receive or won’t get one quickly.

But when this many people have extensive damage to their most significant asset, billions of dollars are at stake for the companies that have the power to make them whole. So there is no reason for policyholders to be anything but wary until their own big check clears.

Many victims of Hurricane Sandy are novices when it comes to catastrophic insurance claims. So to see what sort of resistance they should expect shortly, I turned to the lawyers and adjusters-for-hire who do nothing but negotiate with insurance companies all day long. Some of them used to work for the companies, in fact.

Here are the things they warn people to watch out for:

THAT INDEPENDENT ADJUSTER Many people with damaged homes have started to meet with representatives who assessed their damaged homes to estimate repair costs. They may have introduced themselves as “independent adjusters,” but this is a misnomer. They represent the insurance company and are not neutral.

In storms like this, large numbers of these freelance claims adjusters parachute in from out of town. In the industry, they are known as storm troopers. They work 18-hour days for a while since no insurance company has enough of its own full-time staff to deploy after a storm like this one. Often, they make enough money not to work for months afterward.

“These guys have a lot of work to do, and it’s a thankless job,” said Matthew Tennenbaum, who used to be an independent adjuster but switched sides and now works for policyholders as a “public” adjuster in Cherry Hill, N.J.

Mr. Tennenbaum worries about the storm troopers’ thoroughness. “They’re going to see 10 properties a day and they’re quickly writing estimates,” he said. “If they spend an extra three or four hours properly writing one estimate, they could have written three more and made more money.”

Though many of them are former builders or contractors, they may not, if time is of the essence, always pull up every floor, explore every inch of the attic or look behind every wall. And they may not know much about your insurance company’s policy.

“The insurance companies hand them a manual, and they may not really understand the manual,” said J. Robert Hunter, the director of insurance for the Consumer Federation of America, who has worked for insurance companies and once ran the federal flood insurance program.  “It’s a crash course at that point.”

  The good news here is that these are not the people who make the final call on your claim. But many policyholders assume that their word is the final word.

WIND VERSUS FLOOD Back at headquarters, other adjusters have their eye on an exclusion that will be crucial for this storm, with its horrific storm surges but relatively mild winds: homeowner’s insurance generally does not cover floods.

Unfortunately, many people do not know this and many more have not purchased or renewed policies with the federal flood insurance program that covers up to $250,000 of flood damage. Researchers from the Wharton Risk Management and Decision Processes Center, working with colleagues at Florida State, the University of Miami and Columbia University, surveyed people in the storm’s path by telephone three days before it hit.

Among people within a block of a body of water, 46 percent had no flood insurance. In areas that had been evacuated in past storms or where the authorities advised people to leave, 58 percent did not have it. Moreover, 39 percent of all the people who thought they did have flood coverage mistakenly believed that their homeowner’s insurance covered it.

People without coverage but lots of damage from the storm surge might do one of a couple of things. A few stubborn ones will sue, arguing that if the wind drove the surge then it’s not really a flood. Judges haven’t taken kindly to this line of reasoning over the years, but that probably won’t keep people from trying again. The Federal Emergency Management Agency may also offer some assistance.

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A Transfer of Power Begins in China

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DealBook: Priceline.com Agrees to Buy Kayak for $1.8 Billion

Just months after going public, Kayak Software has been snapped up by a rival.

On Thursday,Priceline.com, a travel company from an earlier Internet age, announced that it would buy Kayak, its younger competitor, for $1.8 billion.

Under the terms of the cash-and-stock deal, Priceline agreed to pay $40 a share. The price represents a 29 percent premium over Kayak’s closing price of $31 a share on Thursday.

“We’re excited to join the world’s premier online travel company,” Steve Hafner, Kayak’s chief executive, said in a statement.

Kayak announced the deal as it reported earnings on Thursday.

The company said it generated revenue of $78.6 million in the third quarter, an increase of 29 percent from the period a year earlier. Its net income rose 14 percent to $8 million.

Kayak’s stock has risen since its I.P.O. in July, in which its shares were priced at $26 apiece. The company had a long journey to the public markets, after initially filing to go public in 2010.

“Kayak has built a strong brand in online travel research and their track record of profitable growth is demonstrative of their popularity with consumers and value to advertisers,” Jeffery H. Boyd, Priceline’s chief executive, said in a statement. “We believe we can be helpful with Kayak’s plans to build a global online travel brand.”

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Doctor and Patient: Comparative Effectiveness Studies Lack Impact

“Comparative effectiveness” studies, which compare one treatment for a particular illness against another to determine which works better, have received a lot of attention and billions of dollars in federal support in the last few years. But when I mentioned comparative effectiveness research recently to a colleague who I know is particularly interested in treatments and the clinical trials behind them, he let out a loud snort and guffaw before I even finished saying the words.

“It’s a great idea, but it’s not real life,” he said, regaining his composure. “Or at least not the real life of a lot of doctors and patients.”

To explain, he described a newly published study on treating children who are thought to have swallowed a small foreign object, like a coin or a toy. He reeled off a long list of laboratory tests, scans, scopes and X-rays that the researchers recommended for such cases, adding, “Those experts assume that everyone lives near big medical centers like theirs, but not all of my patients do. And what are we going to do if the insurance company doesn’t approve of all the tests we order?”

It took only a cursory review of comparative effectiveness research over the last decade for me to realize that my colleague was right. Despite many useful and even potentially cost-saving findings, many of them failed to change doctors’ practice and patient care.

Now a group of researchers has offered a cogent analysis in the journal Health Affairs to explain this failure. And they have done so using methods about as different from comparative effectiveness as research can be.

The researchers talked to more than 50 doctors, patient advocates and other health care experts, each of whom had created, conducted or evaluated comparative effectiveness research or helped introduce the findings into clinical practice. During the interviews, they referred to trials of blood pressure medications, spine surgery, antipsychotic drugs, a heart rhythm device, heart catheterizations and bone marrow transplantation, and then asked why some of these studies seemed to inspire enduring changes while others did not.

A handful of factors came up again and again. Those interviewed frequently referred to the fact that many of these studies did not address the actual needs of practicing clinicians and patients. For instance, one study of medications for treating psychosis focused on the differences in efficacy among the drugs, but mental health care providers really wanted to know about differences in safety.

Sometimes, too, a study’s conclusions required such a significant shift in thinking that doctors and patients had difficulty adjusting to the change, like the recent recommendations against using measures of the prostate-specific antigen, or PSA, as a screening test for cancer. Other times, the findings were so nuanced or ambiguous, with such complicated restrictions on what worked best when, that they simply were not incorporated into professional guidelines or recommendations.

But perhaps the most common reason for these studies’ failures came down to dollars. In the current health care system, clinicians are rewarded for doing and ordering more. Pharmaceutical and medical device firms reap fortunes from physicians’ orders, and a single change could cost them billions. Studies that endorse anything less than another expensive procedure or a newer and more expensive medication or the latest device are often destined for failure or a protracted struggle against drug and device companies that are willing to put up a costly fight.

“The incentives are all out of whack,” said Justin W. Timbie, the lead author and a health policy researcher at the RAND Corporation in Arlington, Va. “The current system favors treatments that are well paid, not necessarily those that are most effective.”

For example, one study found that generic diuretic pills that cost pennies a day worked better for patients with high blood pressure than newer drugs that could be as much as 20 times as expensive. Because hypertension affects tens of millions of Americans, this finding had the potential to save the health care system billions of dollars.

But the finding never really took hold; the percentage of patients taking the cheaper diuretics barely increased. Physicians had a difficult time changing their prescribing habits; limited funding prevented researchers from widely disseminating the results; and pharmaceutical companies waged an aggressive marketing campaign that included paying health care experts to speak about the study in a way that made their expensive drugs seem better.

Based on their findings from these interviews, Dr. Timbie and his fellow investigators offer several suggestions that may improve the impact of these studies. These include realigning financial incentives to support recommended changes in practice; incorporating a broad range of perspectives, like those of practicing doctors and patients, in the design, goals and interpretation of such studies; and, above all, proceeding with a clear strategy for all future comparative effectiveness research.

Despite the challenges, the researchers remain optimistic about the future. And for good reason. Their study was initiated by policy makers and financed by the federal office responsible for health care policy coordination and planning. And representatives from the new national organization, the Patient-Centered Outcomes Research Institute, whose mission is to develop and oversee such studies, have reviewed and discussed the suggestions with Dr. Timbie and the other authors of the study.

“The track record to now has not been great, but for the first time, comparative effectiveness research is a priority for the country,” Dr. Timbie said. “The whole process of generating new evidence has a degree of governance that has never existed before.”

“It’s all about impact now,” he added.

Read More..

Doctor and Patient: Comparative Effectiveness Studies Lack Impact

“Comparative effectiveness” studies, which compare one treatment for a particular illness against another to determine which works better, have received a lot of attention and billions of dollars in federal support in the last few years. But when I mentioned comparative effectiveness research recently to a colleague who I know is particularly interested in treatments and the clinical trials behind them, he let out a loud snort and guffaw before I even finished saying the words.

“It’s a great idea, but it’s not real life,” he said, regaining his composure. “Or at least not the real life of a lot of doctors and patients.”

To explain, he described a newly published study on treating children who are thought to have swallowed a small foreign object, like a coin or a toy. He reeled off a long list of laboratory tests, scans, scopes and X-rays that the researchers recommended for such cases, adding, “Those experts assume that everyone lives near big medical centers like theirs, but not all of my patients do. And what are we going to do if the insurance company doesn’t approve of all the tests we order?”

It took only a cursory review of comparative effectiveness research over the last decade for me to realize that my colleague was right. Despite many useful and even potentially cost-saving findings, many of them failed to change doctors’ practice and patient care.

Now a group of researchers has offered a cogent analysis in the journal Health Affairs to explain this failure. And they have done so using methods about as different from comparative effectiveness as research can be.

The researchers talked to more than 50 doctors, patient advocates and other health care experts, each of whom had created, conducted or evaluated comparative effectiveness research or helped introduce the findings into clinical practice. During the interviews, they referred to trials of blood pressure medications, spine surgery, antipsychotic drugs, a heart rhythm device, heart catheterizations and bone marrow transplantation, and then asked why some of these studies seemed to inspire enduring changes while others did not.

A handful of factors came up again and again. Those interviewed frequently referred to the fact that many of these studies did not address the actual needs of practicing clinicians and patients. For instance, one study of medications for treating psychosis focused on the differences in efficacy among the drugs, but mental health care providers really wanted to know about differences in safety.

Sometimes, too, a study’s conclusions required such a significant shift in thinking that doctors and patients had difficulty adjusting to the change, like the recent recommendations against using measures of the prostate-specific antigen, or PSA, as a screening test for cancer. Other times, the findings were so nuanced or ambiguous, with such complicated restrictions on what worked best when, that they simply were not incorporated into professional guidelines or recommendations.

But perhaps the most common reason for these studies’ failures came down to dollars. In the current health care system, clinicians are rewarded for doing and ordering more. Pharmaceutical and medical device firms reap fortunes from physicians’ orders, and a single change could cost them billions. Studies that endorse anything less than another expensive procedure or a newer and more expensive medication or the latest device are often destined for failure or a protracted struggle against drug and device companies that are willing to put up a costly fight.

“The incentives are all out of whack,” said Justin W. Timbie, the lead author and a health policy researcher at the RAND Corporation in Arlington, Va. “The current system favors treatments that are well paid, not necessarily those that are most effective.”

For example, one study found that generic diuretic pills that cost pennies a day worked better for patients with high blood pressure than newer drugs that could be as much as 20 times as expensive. Because hypertension affects tens of millions of Americans, this finding had the potential to save the health care system billions of dollars.

But the finding never really took hold; the percentage of patients taking the cheaper diuretics barely increased. Physicians had a difficult time changing their prescribing habits; limited funding prevented researchers from widely disseminating the results; and pharmaceutical companies waged an aggressive marketing campaign that included paying health care experts to speak about the study in a way that made their expensive drugs seem better.

Based on their findings from these interviews, Dr. Timbie and his fellow investigators offer several suggestions that may improve the impact of these studies. These include realigning financial incentives to support recommended changes in practice; incorporating a broad range of perspectives, like those of practicing doctors and patients, in the design, goals and interpretation of such studies; and, above all, proceeding with a clear strategy for all future comparative effectiveness research.

Despite the challenges, the researchers remain optimistic about the future. And for good reason. Their study was initiated by policy makers and financed by the federal office responsible for health care policy coordination and planning. And representatives from the new national organization, the Patient-Centered Outcomes Research Institute, whose mission is to develop and oversee such studies, have reviewed and discussed the suggestions with Dr. Timbie and the other authors of the study.

“The track record to now has not been great, but for the first time, comparative effectiveness research is a priority for the country,” Dr. Timbie said. “The whole process of generating new evidence has a degree of governance that has never existed before.”

“It’s all about impact now,” he added.

Read More..

News Analysis: For Obama, Housing Policy Presents Second-Term Headaches

A second-term president may be just the person to tackle America’s housing problems.

When President Obama first came into office, home prices were crashing, foreclosures were soaring and the previous Bush administration had just initiated the bailout of Fannie Mae and Freddie Mac, the government-backed entities that agree to repay mortgages if the original borrower defaults.

With the market in shambles in 2009, the Obama administration pursued a tentative housing policy, for the most part avoiding big moves that might have further weakened the housing market or banks. Eventually, there were some bolder initiatives, like the national mortgage settlement with big banks as well as the Treasury Department’s aid programs for homeowners.

But as President Obama’s first administration comes to an end, the government is still deeply embedded in the mortgage market. In the third quarter, various government entities backstopped 92 percent of all new residential mortgages, according to Inside Mortgage Finance, a publication that focuses on the home loan industry.

Mr. Obama’s economic team has consistently said it wants the housing market to work without significant government support. But it has taken few actual steps to advance that idea.

“I think Obama is absolutely committed to reducing the government’s role,” said Thomas Lawler, a former chief economist at Fannie Mae and founder of Lawler Economic and Housing Consulting, an industry analysis firm. “But no one’s yet found a format to do that.”

Housing policy is hard to tackle because so many people have benefited from the status quo. The entire real estate system — the banks, the agents, the home buyers — all depend on a market that provides fixed-rate, 30-year mortgages that can be easily refinanced when interest rates drop. That sort of loan is rare outside of the United States. And any effort to overhaul housing and the mortgage market could eventually reduce the amount of such mortgages in the country, angering many and creating a political firestorm.

In other words, the best person to fundamentally change how housing works may be a president who won’t be running for office again.

Most immediately, the housing market has to be strong enough to deal with a government pullback. Some analysts think it’s ready. “I think the housing recovery is far enough along that they can start winding down Fannie and Freddie,” said Phillip L. Swagel at the University of Maryland’s School of Public Policy, who served as assistant secretary for economic policy under Treasury Secretary Henry M. Paulson Jr.

The administration can take smaller steps first. Mr. Lawler, the housing economist, thinks the government could start to reduce the maximum amount that it will guarantee for Fannie and Freddie loans. In some areas, like parts of the Northeast and California, it is as high as $625,000. Before the financial crisis, it was essentially capped at $417,000.

The big question is whether the private sector — banks and investors that buy bonds backed with mortgages — will pick up the slack when the government eases out of the market. If they don’t, the supply of mortgages could fall and house prices could weaken.

Banks say their appetite depends on how new rules for mortgages turn out. In setting such regulations, some tough choices have to be made.

The new rules will effectively map the riskiness of various types of mortgages. In determining that, regulators will look at the features of the loans and the borrowers’ income. Banks say they are unlikely to hold loans deemed risky, and their lobbyists are pressing for legal protection on the safer ones, called qualified mortgages.

The temptation will be to make the definition of what constitutes a qualified mortgage as broad as possible, to ensure that the banks lend to a wide range of borrowers. But regulators concerned with the health of the banks won’t want a system that incentivizes institutions to make potentially risky loans.

One set of qualified mortgage regulations, being written by the Consumer Financial Protection Bureau, could be completed as early as January. Other regulators, like the Federal Reserve, are expected to take longer in finishing their mortgage rules.

Resolving the conflict between mortgage availability and bank strength may depend on the person who replaces Timothy F. Geithner as Treasury secretary. Mr. Geithner is stepping down at the end of Mr. Obama’s first term.

The Obama administration faces other daunting decisions.

One is how to deal with the considerable number of troubled mortgages still in the financial system. Banks might be reluctant to make new loans until they have a better idea of the losses on the old loans. “If you don’t ever deal with these problems, you may never get to where you want to go,” said Mr. Lawler, the housing economist.

To help tackle that issue, the new administration might decide to make its mortgage relief programs more aggressive. It might even aim for more loan modifications, writing down the value of the mortgages to make them easier to pay. The Federal Housing Finance Agency, the regulator that oversees Fannie Mae and Freddie Mac, has effectively blocked such write-downs on the vast amount of loans those entities have guaranteed.

A new Obama administration may move to change the agency’s stance on write-downs, perhaps by replacing its acting director, Edward DeMarco. If that happened, it would be a sign that the White House had a taste for more radical housing actions. The agency declined to comment.

Then there’s what to do with the Federal Housing Administration, another government entity that has backstopped a huge amount of mortgages since the financial crisis. The housing administration was set up to focus on lower-income borrowers, and it backs loans that have very low down payments. Its share of the market has grown since the crisis. The F.H.A. accounted for 13 percent of the market in the third quarter, according to Inside Mortgage Finance.

The new administration has to decide whether it wants the F.H.A. to continue doing as much business. The risk is that a big pullback by the F.H.A. could reduce the availability of mortgages to lower-income borrowers. Banks almost certainly won’t want to write loans with minuscule down payments since they are considered riskier.

Ultimately, housing policy comes down to one question: Which borrowers should get the most subsidies?

Right now, the government largess encompasses a wide swath of borrowers. But most analysts believe government support should be focused on lower-income borrowers.

“We will know that the Obama administration is serious about housing finance reform when it comes up with a proposal for affordable housing,” said Mr. Swagel, the University of Maryland professor.

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