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The American Recovery and Reinvestment Act of 2009 included new funding for developing better evidence about health interventions, with a down payment of $1.1 billion for comparative effectiveness research. Our analysis of funds allocated in the legislation found that nearly 90 percent of the $1.1 billion will eventually be spent on two main types of activity: developing and synthesizing comparative effectiveness evidence, and improving the capacity to conduct comparative effectiveness research. Based on our analysis, priorities for the new funding should include greater emphasis on experimental research; evaluation of reforms at the health system level; identification of effects on subgroups of patients; inclusion of understudied groups of patients; and dissemination of results.

Congress and the Obama administration are considering redirecting federal spending on the Medicaid disproportionate-share hospital (DSH) program to help pay for health reform. In this paper, we propose linking federal Medicaid DSH funding to state-level Medicaid enrollment or uninsured populations, or both. This approach could produce as much as $44 billion in federal savings over time without exposing hospitals to uncertain or across-the-board spending cuts. It could also gradually address state variations in Medicaid DSH funding. We also offer ideas to ensure that DSH spending is more directly connected than it is now to improvements in care for vulnerable populations.