Comparative Effectiveness Research: Will It Have Teeth? Part I

One of the most controversial provisions in the economic stimulus bill that President Obama just signed would give $1.1 billion to fund medical research that compares the benefits and risks of alternative medical treatments. 

Ostensibly, progressive health care reformers won this round: the funding was approved.  But now, observers are questioning whether Congress will give Medicare the power to use this research in a way that that matters: to redistribute health care dollars with an eye to lifting the quality and reducing the cost of healthcare.  Wednesday on The HealthCare Blog, Joe Flower suggested that, in the end, the forces of darkness (Rush Limbaugh,  will prevail.  Or as he puts it, the “fulminating rage” of those who peddle “fear and ignorance” will overcome both reason and science. 

Here, I have to disagree. As regular readers know, I am hardly a recklessly optimistic voice on the healthcare reform circuit. But this is a subject that The Century Foundation’s Working Group on Medicare Reform has been discussing, and based on our conversations, I believe that Medicare will be able to give the research financial teeth. (For information on the Working Group, and its members, click here)

That said, I doubt Medicare will suddenly refuse to pay for popular treatments that it covers today—unless the research reveals serious risks. But I do think that Medicare will use financial incentives to steer both patients and physicians toward the products and services that comparative research shows are most effective. 

Moreover, I believe that the public is ready—even eager—for solid, unbiased information about the effectiveness of various medical products and procedures.

Over the last decade, our newspapers have been filled with tales of doctors bribed to prescribe the priciest devices, the newest (and riskiest) drugs. Popular drugs have been withdrawn from the market—but only after countless patients were felled by fatal heart attacks and strokes. The New York Times quotes cardiologists telling us that their colleagues are doing too many unnecessary bypasses and angioplasties, exposing patients to risks without benefits.

Physicians such as Dr. Nortin Halder and Dr. Michale Ozner are writing books with titles like Worried Sick and The Great American Heart Hoax.  Ozner reminds us of what Harvard’s Dr. Eugene Braunwald, a highly esteemed –and prescient– professor of medicine wrote in The New England Journal of Medicine in 1977: “An even more insidious problem is that an industry is being built around heart bypass surgery. .  . [T]his rapidly growing enterprise is developing a momentum of its own, and as time passes, it will be progressively more difficult to curtail it . . .”

Hadler offers the good news “Around the world, groups of investigators are sifting through all the evidence to sort the wheat from the chaff.” American patients would like to be privy to that information. We no longer want to rely on TV ads to tell us what works, and what doesn’t.

Finally, I believe that the voters who put President Obama in office, with an average campaign contribution of just $86, are now in a position to make legislators  think twice before letting special interests trump voters’ interests.

Because if voters make up their mind to vote the bum out of office, the lobbyists can’t save him–especially these days, when voters’ contributions are becoming key to building a winning war chest. 

Who Opposes Comparative Effectiveness Research?

First,  the opposition.  Even before the fiscal stimulus bill passed Congress, the Citizens’ Council on Health Care sounded the alarm: “Government officials want to define ‘effective’ care and make sure patients don't get anything else.”  (MEDIA RELEASE Tuesday, February 10, 2009).  

Last week, the Wall Street Journal reported that: “The drug and medical-device industries are mobilizing to gut a provision in the stimulus bill that would spend $1.1 billion on research comparing medical treatments, portraying it as the first step to government rationing.”  This makes it clear that the lobbyists’ opposition to any health reform proposals that might affect their revenue stream will be fierce. 

The same day, a Bloomberg editorial by former New York lieutenant governor  Betsy McCaughey warned that funding to compare the benefits and risks of  various drugs and medical devices “is dangerous to your health and the economy. “ McCaughey should know. As Ezra Klein points out: "McCaughey is not only employed by a think tank that is funded by the drug industry, she is currently on the board  of a medical device company.” 

Industry advocates like McCaughey are running scared because they know that the drug and medical device industry now accounts for roughly 15% of the $2.6 trillion that the U.S. is projected to spend on healthcare this year. Often, the pharmaceutical industry’s share of the pie is reported as “just 10 percent”—but that only includes the drugs that patients buy retail, at a pharmacy. Add in the cost of the many inordinately pricey drugs that are administered in a doctor’s office or a hospital (including cancer drugs), plus ever-more-expensive medical devices, and the drug and device industry will take in up to $390 billion of the nation’s healthcare dollars this year. Meanwhile the FDA does not require that manufacturers provide any evidence that their cutting-edge product is, in fact, more effective than the almost always less expensive rivals that it is trying to replace. Sponsors only need to show that their entry is better than a placebo.

This makes the drug and device industry a very fat target for those who are interested in trimming spending in a way that won’t hurt patients.  There is no question: running head-to head comparisons of rivals’ treatments makes sense.  This is not a radical idea. The government has been doing such research for years– though it has not been well-funded, and you don’t hear much about it.  Meanwhile those who profit from medical products and services have resisted such comparisons; they know that, if well-publicized, such research would create winners and losers. Who wants to be a loser, especially with $390 billion at stake? It’s much easier to hype a product if it has never been tested against the competition.

Critics of “comparative” research frequently charge that such investigations will lead to “cookbook medicine” that recommends the same treatment for everyone, failing to customize care for the individual patient . But that couldn’t be further from the truth.  As research demonstrates, today we tend to use new medical technologies on a broad swathe of patients, without being sure who will be helped and who will be harmed.  Now that’s cookbook medicine, with the recipes written by the manufacturers and sponsors who are peddling the new, new thing.  Comparative effectiveness research helps pinpoint which patients are more likely to benefit from a particular treatment by looking at outcomes among patients who fit a particular profile. In other countries, that information is used to create guidelines (not rules) for healthcare providers.

“Comparative” Effectiveness vs. “Cost” Effectiveness

Foes of the research also warn that bureaucratic bean-counters will begin denying care for particular treatments simply because they are too costly.  Here they lump together two kinds of analysis: comparative-effectiveness research– which simply  picks the better of two treatments, regardless of how much they cost— and “cost-effectiveness” analysis which, focuses on the money.  When assessing “cost-effectiveness,” the decision is based on whether the treatment is just too expensive to justify its use. The implicit premise here is that we should do a cost-benefit analysis and establish a threshold beyond which health care consumption and spending is unreasonable and counter-productive.

The Century Foundation’s Working Group on Medicare Reform agrees that most Americans are not yet ready to make decisions about whether a treatment is “cost-effective.”  In order to vote, you have to ask questions such as “how much is six months of life worth? . . .  Is $100,000 too much for taxpayers to spend on a drug that will give the average patient another six months?”

But the legislation just passed does not ask anyone to make these decisions. Instead, it simply sets up a new federal agency called the Federal Coordinating Council for Comparative Effectiveness Research to conduct and support  research” that would assess the benefits of competing treatments. The winner would be the treatment that offers greater benefits for particular patients, whatever the cost.

As Merrill Goozner recently pointed out on GoozNews:  “When one drug, device, surgery or other medical technology is clearly superior to another, then the U.S. health care system, which operat
es without cost controls, pays for it. This legislation reinforces that approach. Based on the experience of the past few weeks, it's clear the U.S. is still many years away from having a rational discussion about limiting access to technologies that have been priced far beyond a societally agreed upon benchmark for what constitutes affordable care.”

But  Merrill observed, even the idea of comparing clinical effectiveness (without worrying about cost )  made  lobbyists so anxious that they persuaded the House to include this paragraph in its Conference report: “The conferees do not intend  for the comparative effectiveness research funding included in the conference agreement to be used to mandate coverage, reimbursement, or other policies for any public or private payer. The funding in the conference agreement shall  be used to conduct or support research to evaluate and compare the clinical outcomes, effectiveness, risk, and benefits of two or more medical treatments and services that address a particular medical condition.”

At first glance, it would seem that the lobbyists have indeed succeeded in “gutting” the legislation.  The House seems to be saying  that while it will fund the research, neither Medicare nor private insurers will be  allowed to use that information when deciding what to cover, or how much to pay for it. Bob Laszewski’s reaction on a post titled “Drug Industry Wins Comparative Research Fight in Stimulus Bill” : “As I said in  my post [last] Wednesday ‘And you know, these guys never lose.’ "

But as Joe Paduda points out over at Managed Care Matters, while “a quick read is disheartening,” a closer look at the language reveals a loophole. The report says that legislators . . . .   "do not intend…to mandate coverage, reimbursement or other policies…" The key here is ‘mandate,’ says Paduda, “the meaning and intent of which is likely to gladden the hearts of many an attorney.“

He explains: “The definition of the term is ‘An official or authoritative command; an order or injunction; a commission; a judicial precept.’ But there's a good bit of flexibility left here. It may well be that creative bureaucrats (that term is not used pejoratively) will be able to use the results to encourage certain types of treatment while discouraging others; to require physicians requesting approval for procedures lacking justification provide support for their request to use those procedures, while approving procedures immediately that comply with research recommendations.”

In other words, the conference report simply says that legislators are not ordering payers to use effectiveness research to make their decisions; it does not say that they are forbidden from taking the information into account.

Moreover, the paragraph is simply part of a conference report, which conveys a sense of the legislators’ intention; it is not binding. The legislation itself is open to interpretation. This is why we have a court system as well as a legislative branch.

If  Congress decides to let Medicare begin negotiating for discounts on drugs (which is possible) and Medicare decides to use information on benefits and risks when deciding how much it is willing to pay (which, on the face of it ,would seem sensible),  it is quite possible that a manufacturer would challenge the action in court. But it is not at all clear that a court would decide in favor of ignoring information about risks and benefits to the patient when deciding how to spend taxpayers’ money.

The Working Group’s Assessment of How Medicare Might Use the Research

The idea of urging Medicare to simply say “no” to more expensive drugs, devices and services that provide no more benefit than cheaper alternatives is tempting.  But the majority of the members of the Working Group believe that, politically, this would be very difficult.  Under the law, Medicare must cover any treatment that is “reasonable and necessary.”  If a treatment is in common use, it is hard to argue that it is not a ‘reasonable’ alternative—even if it is unnecessarily expensive.

On the other hand, if a treatment is clearly not effective for patients who fit a certain profile —with strong evidence of clinically meaningful differences–Medicare should be able to argue that covering it is not “reasonable."

It will be essential to make it clear that efficacy and safety –not costs–are driving the decision .

Nevertheless, the Group recognizes the political reality: anytime Medicare refuses to cover a product or procedure, lobbyists representing whoever profits from the treatment will howl “rationing”—despite the fact that medical evidence shows that the product or service provides no benefit to certain patients.

In part 2 of this post, I will talk about what the Working Group has discussed about how  Medicare might use the research to adjust both co-pays for patients and fees to providers. I also will explain how MedPac (the Medicare Payment Advisory Commission ) and the CBO (the Congressional Budget Office) have paved the way for using medical research in just this way.

Finally, I’ll talk about how CBO director Peter Orszag’s new position in the White House makes it all but certain that the White House will have a clear, well-reasoned response to the forces of “ignorance and fear.”

7 thoughts on “Comparative Effectiveness Research: Will It Have Teeth? Part I

  1. It’s been difficult for the Medicare program to contol the substantial costs of cancer drugs. In a recent issue of the New England Journal of Medicine, an article by Dr. Peter Bach stated that the costs to Medicare of injectable cancer drugs given in doctors’ offices increased from $3 billion in 1997 to $11 billion in 2004, an increase of 267% at a time when the costs for the entire Medicare program increased 47%.
    It also states that there was a huge reduction in Medicare expenses that occurred when the off-label use of ESAs (drugs for anemia-related issues) was found to actually cause harm to patients. The drugs were proven to be over-used and the net result of expose was that use of these drugs quickly dropped and the costs to Medicare dropped from over $1 billion a year to just $200 million.
    In 2003, in the political payback deal of the century, Congress guaranteed premium pricing for pharmaceuticals, by prohibiting Medicare from negotiating drug prices, and it provided hundreds of billions of dollars in U.S. taxpayer subsidies to pay for these premium drug costs. Now the specter of “rationing” is raised.
    Dr. Bach stated ways that the Medicare program could control costs. One of those ways was to fund a comparative-effectiveness program to assess whether or not treatments (mostly the newer targeted regimens) are really better than older treatments. Decisions are being made about what cancer treatments patients can actually afford.
    Comparative research is not rationing health care. The research funding doled out in the recent Stimulus Package would go to the National Institute of Health, the Agency for Healthcare Quality and Research and the Centers for Medicare and Medicaid Services to focus on producing the best unbiased science possible.
    Comparative research has the potential to tell us which drugs and treatments are safe, and which ones work. This is not information that the private sector will generate on its own, or that the “industry” wants to share. Companies want to control the data, how it is reviewed, evaluated, and whether the public and government find out about it and use it. Just about the way they are controlling data now.
    Comparative research is not something for patients to be afraid of. It can help doctors and patients, through research, studies and comparisons, undertand which drugs, therapies and treatments work and which don’t. Nothing in the legislation will have the government monitoring treatments in order to guide your doctor’s decisions. Doctors will still have the ultimate decision, along with the patient.

  2. Fantastically presented, I certainly look forward to the 2nd post . . .
    In Milton Friedman’s (by no means a regulationist) seminal work ‘Capitalism and Freedom’ he admits the need for government intervention in so called ‘neighborhood’ circumstances, where the benificent sum is greater than the individual entities (education, public health, national defense, carbon caps/tax?). It can be argued that in this circumstance of comparitive drug trials the medical community has run into such a circumstance.

  3. To drug and device industry’s boom days are over.
    At best they have duped and swindled us.
    At worst they have harmed us.
    I think most of the US public knows this by now -even those perhaps in Republican Congresional districts
    Dr. Rick Lippin
    (Charter “Hadlerian”)

  4. Gregory,Benjamin, Rick
    Gregory– Thank you for an excellent summary of why we need this reserach.
    Cancer drugs are definitely an area that will be targeted. Many oncologists are horrified by the high price of these drugs, and many feel that they are being overused in cases where they provide no benefit, and expose the patient to needless side effects.
    Common sense tells us that some of these drugs must be better–for particular patients–than others.
    The only way to find out is to measure them against each other.
    This is such an obvious thing to do.
    The only reason it hasn’t happened is that an enormously wealthy and powerful industry has managed to bribe Congress.
    The public is becoming more and more aware of what has been going on.
    Benjamin– Thank you.
    You are entirely right, this is a “public good”– something that even Friedman woudl say should be regulated by the govt.
    Rick–I think Pharma’s boom days are definitely over. . .Device-makers, I’m not so sure.
    People aren’t as aware of what they have been doing, because you and I don’t buy devices– hospitals buy them, and the cost is hidden in very complicated hospital bills.
    Meanwhile the device industry has been growing richer and more powerful, without much scrutiny.
    It will be intersting to see whether a new FDA really bears down on that industry . . (It’s also a sleazy industry, known for taking physicians to strip clubs when wining and dining them . . . )

  5. Excellent piece. However the legislation DOES forbid the government agencies from using the information gained from CER for making coverage decisions — see this from the Senate Finance Cte —
    Q: Can the government use the results of this research to tell me, or my doctor, what tests and treatments I can or cannot have?
    A: Absolutely not. In fact, the Senate bill specifically prohibits the government from making any coverage decisions based on this research, or even from issuing guidelines that would suggest how to interpret the research results. The sole aim is to disseminate the results of the research to the public, so that patients and their doctors can make the best decisions for their specific situations, together.

  6. Linda B–
    I believe you are referring to the Conference Report–not the actual legislation. The confernece report is meant to indicate the intent of Congress, but it is not binding.
    (Actually, I googled the language you quote– it seems to come from a press release. Definitely not binding.)
    Also, if you read this post all of the way through, you’ll see what Joe Paduda has pointed out about the langauge in the conference report. The phrase “does not mandate . . ” is key.
    Finally, the language says nothing about co-pays.
    That said, it is extremely unlikely that Medicare would tell doctors that they Must follow certain guidelines. That’s why they are called “guidelines” not rules.
    IN the UK, the government issues guidelines based on comparative effectivenss research; doctors are not required to follow them.
    But they do follow them about 89% of the time.
    Many U.S. doctors would welcome
    guidelines for best practice, especially if it’s organized, on line, in a way that’s easy to access.
    In terms of what Medicare will do, it’s very likely that, in addition to issuing guidelines, they will raise co-pays for less effective treatments.
    This is what Peter Orszag, formerly head of CBO, and now head of OMB in the White—and probably the most powerful player on these issues– has talked about in the past. Orszag, by the way, was he White House person who wound up responsible for the final language of the bill.
    Medicare already charges patients more for treatments that are no more effective, but are more expensive. Very recently, Medicare decided that if patients want a virtual colonoscopy rather than a regular colonoscopy, the patient must pay the difference.
    Medicare also will be adjusting its fee schedule sometime soon–raising fees for primary care physicains, lowering fees for some services performed by other physicians.
    Inevitably, those who are adjusting the fees will have current comparative effectiveness research in the back of their minds.
    Finally, in its most recent report, CBO indicated that there may need to be some new legislation to give comparative effectiveness reserach financial teeth.
    There is no point to spending more money on comparative effectiveness info unless we are going to use it.
    We know, from past experience, that doctors and patients won’t use it unless financial incentives are aligned in such a way as to force them to do so. Many paitents (and even doctors) tend to believe the newest, most expensive treatment or test must be better. . .
    Medicare will have to use the research simply because Medicare is running out of money. So it can’t continue to pay for ineffective treatments. The only way to steer patients and doctors away from ineffective treatment–and toward more effective treatments–is to use financial carrots and sticke.
    The alternative: to go through with 20% across the board cut in doctors’ fees, as scheduled by law, on January 1, 2010.
    That won’t happpen. (Too many doctors would stop taking Medicare patients.)
    But they are going to have to find the money somewhere.
    The most sensible place is by zeroing in on what’s efefctive and what isn’t.

  7. Very informative discussion. Unfortunately, decisions regarding treatments and medications are no longer made by physicians and their patients. Third party payers make decisions for patients before they even enter the doctor’s office. Fail first policies, preferred drug lists, prior authorizations and ‘reasonable cost’ coverage restrictions dictate which treatment and medication patients will receive. Adding the government to the list of intruders is no assurance that patients will benefit.