Senate Finance Committee Proposals for Delivery System Reform: Analysis of Comparative Effectiveness Review Options

The Senate Finance Committee says it is considering options to establish a “long-term or permanent framework to set national priorities for comparative clinical effectiveness research” to compare clinical outcomes of various therapies or medical treatment strategies.
 
The committee outlines several options, including funding existing HHS entities through annual appropriations, basically following the model established in this year’s stimulus bill in which $1.1 billion was allotted to NIH, AHRQ, and the secretary of HHS for comparative effectiveness research.  But, as the committee points out, this “discretionary funding can be inconsistent and unstable.  Also, the research agenda could be unduly influenced through the political process.”

Unfortunately, the other options presented by the committee lend themselves to the same problems or create new ones.  

The Finance Committee offers the option of establishing a new “private, non-profit corporation that would generate and synthesize evidence on what works in health care”.   

This independent institute would be governed by a board of “clinicians, patients, manufacturers, as well as researchers, scientists and private and public payers,” and its work would be reviewed by the GAO.  

That would mean an outside group without any direct accountability to taxpayers would be directing spending of tens of billions of taxpayer dollars in CE research.  The risks of politicization of the members and their decision-making process would still exist, but the group’s accountability would be marginal.  It is hard to imagine Congress giving authority over such crucial decisions to an unelected, unaccountable outside institute.

The same concerns hold true for creation of “an independent, expert committee” that would be created by either the institute or by the secretary of HHS and charged with developing research standards.  The fate also is unclear how either of these groups would interact, if at all, with the new Federal Coordinating Council for Comparative Effectiveness Research which is tasked with coordinating spending of the $1.1 billion in stimulus CER money.  The Council’s members already have been appointed – all of them government officials – and it has begun meeting.

The Finance Committee’s confused and weak recommendations
provide a hint of the complexity involved with centralized decision-making about something as personal as health care.  

Experts from Europe and Canada, where comparative effectiveness agencies already are established, warn that this is far from a glide path to saving money and improving the quality of care which many political leaders believe.  

Professor Michael Schlander, a well-respected German physician, medical researcher and economist, found that decisions by the National Institute for Health and Clinical Excellence in the U.K. have actually led to higher spending for the National Health Service, not the savings that had been expected.

The complexities of the clinical decision-making process are enormous, including the necessity of taking into account the needs of patients who may fall outside norms.  Individual differences in responses to drugs and treatments are shoved aside, especially disadvantaging patients who do not respond well to standard care.

The central problem lies in having the federal government serve as the ultimate decision-maker in comparative effectiveness reviews.  CER certainly has a place in the health care system in which multiple entities are analyzing and reviewing research, but one centralized government decision-making body simply cannot take into consideration the individual needs of multiple payers and 300 million Americans.

A centralized system conceived to compile information about the relative effectiveness of medical treatments would quickly turn into a tool to reward doctors who follow recommendations and punish those who don't.  Doctors and hospitals would be directed to follow the recommendations, and their reimbursement – and risk of lawsuits – likely would depend on compliance.  Comparative effectiveness boards, not doctors, would be making decisions about which treatments would be available, and the system would become more and more rigid as doctors fear going against the rules.

It is also evident that comparative effectiveness would stifle innovation.

Comparative effectiveness essentially replaces the experience, wisdom and knowledge of physicians with bureaucracies that reduce decisions to formulas.  In the name of protecting their bottom lines, public and private health care plans would likely refuse to cover treatments and procedures that didn't have the approval of this centralized agency.

Physicians and hospitals, fearing lawsuits, would also be much less likely to try treatments not yet analyzed and approved by the comparative effectiveness body – even if early evidence suggests a treatment might work for a particular ailment or set of patients. Bureaucracy replaces innovation.

And medical companies would be less likely to pursue research on new and potentially life-saving drugs, biologics, and medical devices when faced with another major bureaucratic hurdle to introducing their products to market. Ultimately, funds for new research would shrivel.  

A centralized process of CER decision-making would slow the adoption of new medicines and other innovations in medical practice, including surgeries.  The health sector would become more rigid and less open to innovation in the process.  Federal standards simply cannot be flexible enough to accommodate the ever-changing and evolving nature of any science, including or perhaps especially medicine.

Those with experience in CER abroad say it is almost impossible to integrate clinical findings and cost estimates because they use different methods of evaluation. As a result, many subjective decisions are made in what is believed to be an objective scientific process.

A new study from the Institut économique Molinari in France says that approval processes in Europe are increasingly “tough, heavy-handed and costly…Despite the best intentions, the inevitable consequence of these regulations is to push up the cost of innovation substantially, to undervalue its benefits and to reduce the number of new products by making certain projects unprofitable.”

The difficulty the Finance Committee clearly has in even establishing an accountable CER process is a harbinger of the complexities to come if this initiative were to be expanded, institutionalized, and centralized in the federal government.

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The Senate Finance Committee says it is considering options to establish a “long-term or permanent framework to set national priorities for comparative clinical effectiveness research” to compare clinical outcomes of various therapies or medical treatment strategies.
 
The committee outlines several options, including funding existing HHS entities through annual appropriations, basically following the model established in this year’s stimulus bill in which $1.1 billion was allotted to NIH, AHRQ, and the secretary of HHS for comparative effectiveness research.  But, as the committee points out, this “discretionary funding can be inconsistent and unstable.  Also, the research agenda could be unduly influenced through the political process.”

Unfortunately, the other options presented by the committee lend themselves to the same problems or create new ones.  

The Finance Committee offers the option of establishing a new “private, non-profit corporation that would generate and synthesize evidence on what works in health care”.   

This independent institute would be governed by a board of “clinicians, patients, manufacturers, as well as researchers, scientists and private and public payers,” and its work would be reviewed by the GAO.  

That would mean an outside group without any direct accountability to taxpayers would be directing spending of tens of billions of taxpayer dollars in CE research.  The risks of politicization of the members and their decision-making process would still exist, but the group’s accountability would be marginal.  It is hard to imagine Congress giving authority over such crucial decisions to an unelected, unaccountable outside institute.

The same concerns hold true for creation of “an independent, expert committee” that would be created by either the institute or by the secretary of HHS and charged with developing research standards.  The fate also is unclear how either of these groups would interact, if at all, with the new Federal Coordinating Council for Comparative Effectiveness Research which is tasked with coordinating spending of the $1.1 billion in stimulus CER money.  The Council’s members already have been appointed – all of them government officials – and it has begun meeting.

The Finance Committee’s confused and weak recommendations
provide a hint of the complexity involved with centralized decision-making about something as personal as health care.  

Experts from Europe and Canada, where comparative effectiveness agencies already are established, warn that this is far from a glide path to saving money and improving the quality of care which many political leaders believe.  

Professor Michael Schlander, a well-respected German physician, medical researcher and economist, found that decisions by the National Institute for Health and Clinical Excellence in the U.K. have actually led to higher spending for the National Health Service, not the savings that had been expected.

The complexities of the clinical decision-making process are enormous, including the necessity of taking into account the needs of patients who may fall outside norms.  Individual differences in responses to drugs and treatments are shoved aside, especially disadvantaging patients who do not respond well to standard care.

The central problem lies in having the federal government serve as the ultimate decision-maker in comparative effectiveness reviews.  CER certainly has a place in the health care system in which multiple entities are analyzing and reviewing research, but one centralized government decision-making body simply cannot take into consideration the individual needs of multiple payers and 300 million Americans.

A centralized system conceived to compile information about the relative effectiveness of medical treatments would quickly turn into a tool to reward doctors who follow recommendations and punish those who don't.  Doctors and hospitals would be directed to follow the recommendations, and their reimbursement – and risk of lawsuits – likely would depend on compliance.  Comparative effectiveness boards, not doctors, would be making decisions about which treatments would be available, and the system would become more and more rigid as doctors fear going against the rules.

It is also evident that comparative effectiveness would stifle innovation.

Comparative effectiveness essentially replaces the experience, wisdom and knowledge of physicians with bureaucracies that reduce decisions to formulas.  In the name of protecting their bottom lines, public and private health care plans would likely refuse to cover treatments and procedures that didn't have the approval of this centralized agency.

Physicians and hospitals, fearing lawsuits, would also be much less likely to try treatments not yet analyzed and approved by the comparative effectiveness body – even if early evidence suggests a treatment might work for a particular ailment or set of patients. Bureaucracy replaces innovation.

And medical companies would be less likely to pursue research on new and potentially life-saving drugs, biologics, and medical devices when faced with another major bureaucratic hurdle to introducing their products to market. Ultimately, funds for new research would shrivel.  

A centralized process of CER decision-making would slow the adoption of new medicines and other innovations in medical practice, including surgeries.  The health sector would become more rigid and less open to innovation in the process.  Federal standards simply cannot be flexible enough to accommodate the ever-changing and evolving nature of any science, including or perhaps especially medicine.

Those with experience in CER abroad say it is almost impossible to integrate clinical findings and cost estimates because they use different methods of evaluation. As a result, many subjective decisions are made in what is believed to be an objective scientific process.

A new study from the Institut économique Molinari in France says that approval processes in Europe are increasingly “tough, heavy-handed and costly…Despite the best intentions, the inevitable consequence of these regulations is to push up the cost of innovation substantially, to undervalue its benefits and to reduce the number of new products by making certain projects unprofitable.”

The difficulty the Finance Committee clearly has in even establishing an accountable CER process is a harbinger of the complexities to come if this initiative were to be expanded, institutionalized, and centralized in the federal government.

SHARE THIS ARTICLE

About the author