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Congress targets comparative effectiveness reform in 2008
Proposed legislation may include creation of an agency and additional funding for research.
 Alan E. Reider |  Allison Weber Shuren |
Congress is expected to propose more rigorous Medicare payment reforms in 2008, given lightweight Medicare reform legislation that resolved several issues only for a brief 6-month period including a 6-month physician payment fix that it passed in late 2007.
Physicians and the health care community should expect to see proposed legislation encouraging comparative effectiveness research and, possibly, legislation authorizing the Centers for Medicare and Medicaid Services to take into account the relative benefit and costs of treatment options in its coverage and payment policies.
In fact, Senate Finance Chairman Max Baucus, D-Mont., and Sen. Kent Conrad, D–S.D., have announced that they will introduce comparative effectiveness research legislation in 2008.
Support for reforms
Although the U.S. Food and Drug Administration approval process ensures that new drugs and devices are safe and effective before they are marketed, the process rarely evaluates whether a new product is more effective than the drugs already on the market. The FDA approval process considers relative value of the products in the rare circumstance in which a manufacturer wishes to make comparative claims about its products (eg, its product is safer than a competitor’s product). These new technologies, among other things, contribute to the ever-increasing cost of health care, and yet there is little information available on whether these new technologies are significantly better than existing treatments.
As forecasters predict that health care spending will escalate to as much as 20% of the gross domestic product by 2019, policymakers are focusing on obtaining more value for each health care dollar spent. Washington policymakers are criticizing drug and medical device manufacturers for marketing new products that present only nominal improvement over existing treatments and technologies, and yet these new products are often significantly more expensive than existing products. Policymakers are questioning whether these added features or new design features are worth the added costs.
Fueled with recent studies indicating that the older, cheaper therapies are just as effective as newer, expensive therapies, comparative effectiveness research has re-emerged as a critical tool to help define which treatments or procedures are most efficient.
Comparative effectiveness research has gained support among key policy advisory bodies. The Congressional Budget Office and the Congressional Research Service issued reports in late 2007 touting potential benefits of comparative effectiveness policies. The Medicare Payment Advisory Commission also recommended in its June report that Congress create an independent body to research and support these activities. Most recently, the Institute of Medicine issued a report on Jan. 24 recommending the development of a national comparative effectiveness program to conduct systematic reviews of evidence and to develop clinical guidelines. Armed with this support, comparative effectiveness and cost-effectiveness likely will be a central topic during the 2008 Senate Finance Committee health care reform hearing and Medicare reforms proposed in early 2008.
Expected reforms
Although it is difficult to predict what Congress will propose, it is likely that any legislation will include creation of a public or quasi-public agency, required financing to support comparative effectiveness research and entail comparative effectiveness research.
Any proposal will likely include creating a new comparative research body. It may be formed as an independent entity of an existing public agency, a new body established under the legislative and executive branches, or a public-private partnership. An advisory board consisting of stakeholders likely will be created to provide input to any public agency.
Secondly, additional funding will need to be generated to cover the cost of any systematic or new clinical research studies. A fee may be imposed on health insurance policy issuers, including public insurance, and sponsors of self-insurance plans to generate the necessary funds.
Lastly, comparative effectiveness research entails evaluating the effect of treatment options given a particular patient population and medical condition. This research may take the form of systematic reviews of existing clinical trial data or claims data, complex modeling analysis, or involve new head-to-head clinical trials. Although meta-analyses of available information may be less expensive to complete, it may yield less definitive conclusions. It may be difficult to compare or reconcile existing data because of the varying methodologies used, different patient populations and conditions, and possibly conflicting results.
Another approach is to compare existing medical claims data. This approach could also be difficult to implement because of limited electronic health record information, the varying level of detail available and constraints on accessing patient information.
Although funding head-to-head trials will result in more conclusive information, it is a much more expensive and time-consuming endeavor. Head-to-head trials likely will be reserved for costly treatments and conditions identified as a top priority. Modeling has been suggested as an approach to supplement clinical trial data and fill in gaps in clinical information. This approach is not likely to be used on a large scale because of the difficulty in simulating and measuring real-life patient care and biological responses to treatment.
Cost savings slow to materialize
Congressional Budget Office officials said it will take years before comparative effectiveness research results in significant health care cost savings. This is due to the significant cost of conducting the research, the time lag before any information is compiled and distributed, and changes in physician practice and patient behavior patterns. Significant savings will only be achieved if private and public payers link payment or cost-sharing burdens to clinical effectiveness.
Armed with comparative effectiveness research, private insurers may expand current policies to not cover, or adjust payment for, expensive and less clinically effective and cost-effective treatments. They may adjust payments to physicians, hospitals and other health care providers and suppliers when they perform a less effective treatment, require prior authorizations for more costly treatments and adjust the cost-sharing responsibility for the patient.
Without a change in Medicare and Medicaid’s coverage and payment policy, comparative effectiveness research will have little effect on public health care costs. Generally speaking, Medicare covers and pays for treatments or procedures that are reasonable and necessary without any consideration of the relative effectiveness and cost of the procedures. Medicare and its contractors have set different payment rates for certain comparable drugs based on a “least costly alternative” policy. These instances have been limited and controversial. Any substantial and widespread changes to Medicare payment and coverage policy likely would require legislation. These changes may include reducing payment to providers for less effective treatments, denying coverage for less effective treatments, requiring beneficiaries to pay for the additional costs of the less effective treatments or paying bonuses to providers for providing efficient care.
Physicians are well-advised to monitor any legislative developments this spring. The growing support for comparative effectiveness research may signal a significant change in the practice of medicine in which the physician is the primary medical decision-maker to an environment where medical decision-making will be influenced by a myriad of players — public agencies, public and private payers, patients and physicians – in an attempt to control health care costs.
For more information:
- Nicole Liffrig Molife, JD, can be reached at Arent Fox LLP, 1050 Connecticut Ave. NW, Washington, D.C. 20036; 202-715-8417; e-mail: liffrig.nicole@arentfox.com.