Obamacare

Comparing Our Way to Rationed Health Care

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The federal stimulus package included $1.1 billion for comparative effectiveness research of medical treatments. Of course, no one wants to use less rather than more effective treatments, but such research can lead to one-size-fits-all medicine.

comparative effectiveness

This is particularly ironic as the age of personalized medicine in which treatment regimens will be tailored to each person's genetic makeup and specific disease characteristics is dawning. Representatives of women's and minority groups have also expressed concern that comparative effectiveness research will ignore differences in medical responses to various treatments that arise from differences in gender and ethnicity. A letter from the Congressional Black Caucus warns:

We are concerned that comparative effectiveness research will be based on broad population averages that ignore the differences between patients.

Supporters of the new federal comparative effectiveness research program claim that such research will look only at comparative clinical effectiveness, not at cost-effectiveness.

Cost-effectiveness means deciding whether or not a treatment is "worth" the amount of money spent on it from the point of view of the payor, not the point of view of the patient or her physician. This is how Britain's National Institute for Health and Clinical Excellence (NICE) works. NICE regularly denies British patients access to drugs that would likely prolong their lives. For example, today the Daily Mail reports

Thousands of patients with terminal cancer were dealt a blow last night after a decision was made to deny them life prolonging drugs.

The Government's rationing body said two drugs for advanced breast cancer and a rare form of stomach cancer were too expensive for the NHS (National Health Service). …

One drug, Lapatinib, can halve the speed of growth of breast cancer in one in five women with an aggressive form of the disease.

Dr Gillian Leng, Nice deputy chief executive, said 'The committee concluded that Lapatinib is not a cost-effective use of NHS resources when compared with current treatment.'

Up to 1,500 stomach cancer patients also face a ban on Sutent – the only drug that can extend their lives.

The report accompanying the stimulus bill in the House of Representatives indiscreetly observed:

By knowing what works best and presenting this information more broadly to patients and healthcare professionals, those items, procedures, and interventions that are most effective to prevent, control, and treat health conditions will be utilized, while those that are found to be less effective and in some cases, more expensive, will no longer be prescribed.

This language suggesting that comparative effectiveness research would be used to limit access to treatments under Medicare and Medicaid was later dropped when the Senate passed the bill. Nonetheless, few doubt that clinical effectiveness results can very easily transmogrify into cost-effectiveness arguments. But why not save taxpayers money by having the government refuse to pay for ineffective treatments? Because it won't work that way.

A recent Congressional Budget Office (CBO) study found that comparative effectiveness research is not likely to save the federal medical programs - Medicaid and Medicare -- much mony anyway. In its study, the CBO calculated that comparative effectiveness research outlays would amount to $2.4 billion over 10 years. Then the CBO estimated that Medicare and Medicaid would save a total of $1.3 billion through reduced expenditures as a result of the comparative clinical effectiveness research. Spending money on comparative effectiveness research would cost $1.1 billion more than it saves the federal government over the next ten years. These amounts are tiny in comparison to the $2.3 trillion that Americans spent on health care in 2007.

The CBO concludes,

Generating additional information comparing treatments would tend to reduce federal health spending somewhat in the near term—but the effect may not be large enough to offset the full costs of conducting the research over the same period of time.

In other words, determining comparative clinical effectiveness—determining that certain treatments are better others—simply will not result in big health care savings.

Comparative effectiveness research could also slow the development of new treatments. The Boston Globe reports:

The most cost-effective drugs may not work for everyone, though, said Joff Masukawa, senior director of government relations and public policy for Shire Ltd., which makes specialty biopharmaceuticals. Assigning a cost-effectiveness grade to a drug or therapy could eventually discourage drug companies from pursuing innovative drugs that treat rare diseases or help relatively few patients, he said.

In addition, clinical effectiveness can be taken into account by private insurers as the Globe notes:

Karen Ignagni, president of America's Health Insurance Plans, an association of health insurers, said one way insurers could take the results of the research into account may be to offer a tiered system that requires patients to pay more for treatments that are seen as less cost-effective.

So instead of bureaucrats deciding for everyone what will be available, the balancing of costs and benefits can be made explicit in the insurance policies that people or their employers purchase.