The idea of “comparative-effectiveness” research has become a hot topic in health care circles. Conservatives are adamantly opposed to it—as are drug-makers, device-makers and even some physicians who have become involved in designing and profiting from new tests and procedures. They don’t want to see their products and services subjected to head-to-head comparisons with the less expensive rivals that they hope to replace. After all, they know that they might lose.  As medical research shows, often, what is “newest" isn’t best.  And with billions of dollars at stake, who wants to be a loser?

But if you think that any mention of comparative-effectiveness research pushes buttons, try talking about appraising the “cost-effectiveness” of medical products and procedures—i.e. asking whether the benefit justifies the price tag. For example, is it really worth paying $100,000 for a drug that will give the patient an extra six months of life?

Often, the two ideas are confused. Indeed, those who oppose health care reform argue that any attempt to set up a Comparative-Effectiveness Institute (as presidential candidate Barack Obama, among others, has suggested) inevitably puts us on a slippery slope headed straight toward making medical decisions based on “cost-effectiveness.”   Before long, the conservatives say, Medicare will be denying treatments simply because they are too pricey. 

Yet, is it such a terrible idea to take cost into consideration?  In a recent issue of the Annals of Internal Medicine, the American College of Physicians (ACP) argues that the United States needs to invest in a national entity that would generate information on both clinical comparative-effectiveness and cost-effectiveness. According to ACP, by failing to make such information available, we undermine efforts by payers, physicians, and patients to make effective, informed choices that optimize the value they receive for their health care dollars.

In the same issue of the Annals, health care economist Gail R. Wilensky, a senior fellow at Project Hope, disagrees, arguing that it is “vitally important to keep comparative clinical effectiveness analysis and cost-effectiveness analysis separate from each other.”  If you talk about “comparative-effectiveness” and “cost-effectiveness” in one sentence, you could doom both ideas.

Measuring “Clinical Effectiveness”—the U.K. Model

Before choosing sides, let’s clarify what measuring
“comparative-effectiveness” means –and how it is different from what we
do today.   One might think that we already test treatments to make
sure that they are more effective than existing products before
welcoming them into the marketplace. One would be wrong.

The FDA requires only that new nostrums are tested against placebos—proving
that they are better than nothing. The FDA also asks that the sponsor
shows that the benefit of the “new, new thing” appear greater than the
short-term risks. (Trials rarely last long enough to measure long-term
risks.)

Manufacturers are happy with the present system. “We’ll never have
comparative-effectiveness Research in the U.S.” a staffer on the Senate
Finance Committee recently told a friend. “The drug-makers and
device-makers don’t want it.”

Yet other countries do feel able to stand up to the lobbyists, and
these governments insist on head-to-head comparisons to help health
care providers determine which treatments are best. In the United
Kingdom, for instance, the National Institute for Clinical Excellence (NICE) reviews new and existing medicines, technologies and treatments.

As I explained
a few months ago: “A NICE appraisal embraces all available information.
During the review process, an independent academic centre draws
together and analyzes all of the published information on the
technology under review and prepares an assessment report. NICE then
consults with patient groups and organizations representing health care
professionals, as well as the manufacturer of the product undergoing
appraisal. As part of the process, medical products are compared to
similar products made by rival manufacturers, and those competitors
also provide input.

In the end, NICE makes the decision, and the National Health Service of
England is legally obliged to provide funding for drugs and procedures
recommended by NICE.  NICE also sends out guidelines to hospitals and
doctors, recommending which products and procedures are likely to be
most effective for patients who fit certainly profiles. These are not
“rules”; health providers are not required to follow the guidelines.
NICE recognizes that every human body is unique; guidelines will never
cover all cases. Nevertheless, doctors and hospitals comply with NICE’s
recommendations 89 percent of the time.

Cost-Effectiveness

But NICE doesn’t just compare the benefits of two treatments; it goes a
step further and considers just how cost-effective they are. Do the benefits of a given treatment justify the price tag?

NICE’s decisions can be controversial. For instance, last year,
when NICE ruled that four drugs for patients suffering from early-stage
Alzheimer’s disease (Aricept, Reminyl, Exelon and Ebixa ) were not
“cost-effective” because they had “only a small clinical effect” on
patients suffering with  mild symptoms of early stage Alzheimer’s,
drug-makers decided to push back. Eisai, which manufactures Aricept,
and Pfizer, which distributes the drug in the U.K., took NICE to the
U.K’s High Court.

This was the first time that NICE’s procedures have been tested by
judicial review—and NICE came out victorious. The court ruled that NICE
had arrived at its decision fairly, and that the drugs should be
covered only for patients in the later stages of the disease.

Are Americans ready to let a U.S. version of NICE tell Medicare
which Alzheimer drugs it should and shouldn’t cover based on price?  Probably not.

Unlike comparative-effectiveness research, which just picks the better
of two treatments, regardless of how much they cost, cost-effectiveness
is all about money. Here the decision is based on whether the treatment
is just too expensive to justify its use. The implicit premise here, of
course, 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.

This means that the sky is no longer the limit. Quality must justify
cost. Here, it’s important to realize that it’s not just drug-makers,
device makers and some highly-paid specialists who object to this idea.
Many Americans are not yet willing to set limits. Doing so means
answering questions like “how much is a year of life worth?”  Are we willing to spend more for that extra year if the patient is 12, and less if he is 80?

The UK has set such limits. But the UK’s healthcare budget is much
smaller than ours. This means that they must make some very difficult
decisions.  Because we have so much more money sloshing around in
our bloated health care system, we can save billions just by
concentrating on effectiveness.

This is not to say that we aren’t paying too much for many treatments.
Today, decisions about what will be covered are made, implicitly, by
the FDA—and the FDA is not allowed to consider prices.  Meanwhile, once
the FDA approves something, Medicare usually agrees to cover it. And
since Medicare gives a product its imprimatur, most private insurers
follow—and pass on the cost in the form of higher premiums.

The problem, as noted, is that the FDA’s standards for approval do not
require that the sponsor show comparative benefit. As a result, not
long ago, the FDA approved a cutting-edge expensive cancer drug that
would give the average patient an extra 10 days of life.  How
many patients will be told that the benefit is so small? The high price
will make many assume that this must be a “breakthrough” product.
Yet, even if the FDA is approving pricey products that are only
marginally more effective, than an older generation of drugs, this does
not mean that the public is ready to let Medicare ration treatments
based on cost.

Emphasis on “Cost-Effectiveness” Could Torpedo Research that Compares Benefits

What is certain is that even if we’re not ready to talk about “cost-effectiveness,” the U.S. does need to institutionalize comparative-effectiveness research
so that programs like Medicare can get ‘smarter’ and focus
reimbursements on the most beneficial, proven treatments. Doing so
would let us pare our health care spending by as much as $358 billion
over ten years, according to Merrill Goozner, who cites a Commonwealth Fund study released in December.

In other words, even without worrying about the cost of a product or procedure, we could be saving “anywhere from one-third to two-thirds the cost of covering uninsured,”
simply by letting head-to-head trials winnow out the less effective
products and services. There is that much low-hanging waste in the
system.

And strategically, it would be a mistake to follow the NICE model and
couple comparative-effectiveness research with cost-effectiveness
research within the same institute, Wilensky argues, because trying to
do both at once may well turn comparative-effectiveness research into a
huge political target.

While there is widespread interest in a comparative-effectiveness
program, “don’t confuse that with widespread acceptance or support,”
she warns.  Wilensky, who has served as an advisor to President George
W. Bush knows that “Until this idea becomes law, it remains just a beautiful but fragile and vulnerable  concept.”
And even if the idea does becomes law, “the sustainability of such a
center will only become clear after it survives the first comparative
clinical effectiveness information that contradicts conventional wisdom
or endangers the latest therapy du jour.”

“The use of cost-effectiveness information is more politically contentious
and its modeling more technically controversial than comparative
clinical effectiveness,” Wilensky adds. “For these reasons, I believe
that payers should do cost-effectiveness analyses, not a national
entity devoted to the development of comparative clinical effectiveness
data. Because clinical effectiveness is the most basic and costly
step in learning how to spend smarter, it should proceed first and in
as politically protected a manner as possible."

This is not to say that Wilenksy doesn’t want information comparing
cost and benefit to be available: “Like the ACP, I support the use of
cost-effectiveness information as an element in decision making by
physicians, patients, and payers for developing smarter strategies of
reimbursement.”  But unlike the ACP, Wilensky does not want a national
comparative-effectiveness institute charged with ruling on
cost-effectiveness.

This is a job Wilensky would leave to the payers: “Cost-effectiveness
information should be an important consideration in setting
reimbursement rates by public and private payers. If an intervention
doesn’t do more, why should a payer pay more for it? If it does do
more, asking how much more and for what additional price becomes
relevant. Payers will have to make difficult decisions, and different payers may make different decisions."

“Whether Medicare will be granted the right to use
cost-effectiveness information in setting reimbursement rates is
unclear, although the history in this regard is not promising,”
Wilensky acknowledges. “The first attempt happened when I was the
administrator of the Health Care Financing Administration (now the
Centers for Medicare & Medicaid Services). The proposed rule was
never released from the Office of the Secretary of Health and Human
Services because of concern about potential future ‘misuse’ of this
authority.”

The Battle Ahead

Wilensky is right.  Even though the prestigious Institute of Medicine issued a report
in January calling for a “single entity” to produce “credible, unbiased
information about what is known and not known about clinical
effectiveness,” this is hardly a done deal.

As Merrill Goozner observed in April: “Powerful forces are mobilizing
to make certain any comparative effective agency established by
Congress remains a toothless tiger.” Already, he noted, “the Advanced
Medical Technology Association, which represents device makers, insists
that “governance of any public-private entity should include
representation of all stakeholders.”

Meanwhile, “a recent article in the Journal of the American Medical Association—which
likened a potential [Comparative-effectiveness] Agency to a Federal
Reserve Board for medicine—also called for putting ‘stakeholders’ on
the board and having input into its studies,”  Goozner observes.

But “no banks sit on the Fed’s board,” Goozner noted.  “And its
studies are conducted by researchers who are scrupulously clean of
financial ties to the banks they regulate.

“It’s one thing to give stakeholders a chance to advise the process –
just as they have input through comment and testimony into any
regulatory proceeding.” This is what NICE does. “But,” Goozner argues,
“to allow industry representatives to sit on the board, and ask
clinicians with conflicts of interest to conduct its studies, would
undermine the new agency’s credibility at the start – and doom it to
being just another babbling voice in the health care wilderness.”

Goozner is right. We need to make sure that any agency that oversees
comparative-effectiveness is insulated from the lobbyists. They should
consult and provide as much information as they have. But they
shouldn’t vote.

In the end, we have to pick our fights. Insist on the
head-to-head studies and insist that they are overseen by someone other
than the product’s sponsors. There we must be firm. But leave questions
about cost-effectiveness for other payers—insurers and employers can
begin that investigation.

As Wilensky observes, we shouldn’t jeopardize a comparative-effectiveness program simply to please private insures: “Payers—especially private payers—would dearly love for [a comparative-effectiveness] center to do cost-effectiveness analysis because they could then share the onus of implementing the results of difficult, contentious, unpopular studies with a reputable national entity.
Their desire is understandable; however, from a long-range perspective,
the wiser course is to leave cost-effectiveness analysis out of the
scope of work of a national comparative clinical effectiveness program.”

Wilensky has been in Washington for quite a while. She speaks with the voice of experience.