A battle is brewing over a plan to rein in medical spending by weeding out ineffective treatments.
As congressional lawmakers continue the thorny task of crafting the sweeping health care reforms they hope to pass this year, there’s a battle brewing over the growing push to rein in medical spending by weeding out ineffective treatments.
That seemingly innocuous strategy — dubbed comparative effectiveness — relies upon research comparing different treatments for the same ailment to uncover which work best. The measure is a key component of the Obama administration’s efforts to overhaul the nation’s broken health care system and control skyrocketing medical spending — both public and private. But some powerful lawmakers, particularly on the Republican side of the aisle, are voicing fears that comparative effectiveness research could lead to restrictions in patients’ access to care by tempting Medicare and private insurers to use the data to deny coverage of certain drugs, devices and other treatments.
Sen. Charles Grassley (R-Iowa) said Tuesday that no one other than doctors and patients should be empowered to make individual treatment decisions.
“I support making sure that patients and doctors have up-to-date and effective information,” Grassley, the highest ranking Republican on the Senate Finance Committee, said during a hearing on health care reform. “But I would doubt support for reforms that allow some government bureaucrat to interfere with a doctor’s ability to practice medicine.”
The debate is heating up in the wake of passage of the $787 billion economic stimulus package, which provided more than $1 billion for comparative effectiveness research, and created a federal board of clinical experts to oversee it. More recently, the Obama administration introduced it’s 2010 budget blueprint, which includes a $634 billion “down-payment” on health care reform. A White House summary of the budget outline vows continued support for comparative effectiveness to “form the basis for clinical decision support tools.”
While the ultimate purpose of the comparative effectiveness research is to create a more efficient — and ultimately less expensive — health care system, the White House has been careful not to dictate how the data will be used. Appearing before the Finance Committee Tuesday, Peter Orszag, director of the Obama administration’s Office of Budget and Management, largely evaded the question.
“At the extreme,” Orszag said, “if something is shown not to be effective, it could simply not be covered. But there also are a lot of, you know, less extreme ways of guiding medical practice, for example, simply paying more for the things that work than the things that don’t … It doesn’t need to be a simple on-off switch.”
Asked by Sen. Jon Kyl (R-Ariz.) if the administration has a position on whether the comparative effectiveness board should be empowered to make reimbursement decisions, Orszag said, “Not at this point.”
That response will likely fuel the concerns of Republicans and some powerful health care industries — including the pharmaceutical and medical device manufacturers — that comparative effectiveness could be a slippery slope to rationing care. Wanda Moebius, spokeswoman for the Advanced Medical Technology Association, a medical device trade group, said the organization supports comparative effectiveness as a clinical study, but worries that cost considerations could take precedent over the unique needs of individual patients.
AdvaMed, Moebius said, “wants to ensure that cheaper doesn’t mean inferior.”
David Merritt, project director at the Center for Health Transformation, a Washington-based policy shop founded by former GOP Speaker of the House Newt Gingrich, echoed that concern, arguing that lawmakers “have to be careful about prioritizing cost effectiveness over clinical effectiveness.”
Robert Blendon, a professor of health policy at Harvard University, said much of that concern comes with one eye on a controversial British institute, which does have the power to deny coverage options based on price. Blendon, an expert* on the Clinton administration’s failed 1993 attempt to revamp the nation’s health care system, supports the research in hopes that doctors, hospitals and other providers will use the information voluntarily to improve health outcomes and, ultimately, eliminate unecessary costs.
“Give people lots of information and see what they do,” he said.
Kathleen Stoll, deputy director of Families USA, a health care consumer group, said the comparative effectiveness debate is so young that concerns about pricing reform are unfounded. “We’re simply talking about pulling the scientific research together,” Stoll said. “It’s not about rationing care, it’s about improving the quality of care.”
Few dispute that something must be done to rein in the nation’s health care costs. In 2009 alone, medical spending nationwide is projected to hit $2.6 trillion, or 18 percent of the gross domestic product, according to the Congressional Budget Office. Within eight years, it will represent 20 percent of GDP. Over the next decade, health care spending is expected to grow by 6.2 percent each year — a rate far higher than incomes and inflation.
The trend is putting a squeeze on budgets at the individual, state and federal levels. CBO projects that the cost to fund Medicare, Medicaid and the State Children’s Health Insurance Program will hit $720 billion this year.
But not all regions spend the same. A well-regarded Dartmouth University study reveals vast regional variations in per patient medical spending, largely because doctors in different parts of the country have adopted different prescribing habits. Importantly, patients in the areas of higher spending are no better off for receiving more treatments.
“The explanation,” Orszag said, “is that in those parts of the country with higher costs, there are more procedures done, more days in hospital, more tests, and what have you — none of which seems to actually improve health outcomes. And that is the key takeaway. If you look at outcomes in quality, the higher-cost states, the higher-cost hospitals, the higher-cost doctors do not produce better outcomes than the more efficient providers.”
Within those discrepancies, Orszag said, the potential for savings is enormous. If health treatment trends nationwide were matched up with those of the lower-spending regions, Orszag said, the country could save $700 billion on medical expenses each year.
But it won’t be easy. Orszag himself has indicated that the initial costs of comparative effectiveness are substantial and the benefits are years away. In a 2007 letter to lawmakers for example, Orszag, then-director of the Congressional Budget Office, wrote that “getting to the point where additional research on comparative effectiveness could have a significant impact on health spending would probably take many years.”
“In addition to the time required to get such research under way,” he added, “a lag would exist before results were generated — particularly if they depended upon new clinical trials. Initially, the available results would probably address a relatively small number of medical treatments and procedures; more time would have to elapse before a substantial body of results was amassed.”
Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, pointed out another impediment to efforts to control high regional spending: the states that currently receive the most money will likely not cede it easily.
“Some of the states are getting a lot of money [and] they’re not going to want to give up,” Baucus said.
Baucus and Grassley have laid out a plan to pass a comprehensive health care reform bill through the Finance Committee in June, with hopes of getting it on Obama’s desk before summer’s end.
Blendon, of Harvard, predicted that health reform in some shape will become law this year. The public, he said, is ready for a larger federal role in providing care, and the recession has pinched pocketbooks around the country. Blendon warned, however, that the sinking economy might also interrupt the health care debate, forcing Democrats to move a lesser bill than they’d hoped.
“The idea of a bigger government role is not in question,” said Blendon. “The wildcard is the state of the economy.”
*Clarification: An earlier version of this story said Blendon was an architect of the Clinton’s health reform plan, which is not the case.
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