1

Comparative Effectiveness Research:Key Issues and Controversies

Consumer-Purchaser Disclosure Project Discussion Forum

May 5, 2009

Steven D. Pearson, MD, MSc, FRCP

2

Background

• Policy givens:– Unsustainable cost increases– Unexplainable variation in practice patterns– Not enough evidence for decisions about new treatments

• International efforts (health technology assessment)– NICE in England

• “Comparative Effectiveness”– Stark bill– Baucus bill

• American Recovery and Reinvestment Act (ARRA) stimulus bill funding for Comparative Effectiveness Research (CER)

3

10-Year Impact on Spendingof a Center for Comparative Effectiveness

-$367.5

-$97.7-$49.1

-$107.1-$113.6

-$400

-$300

-$200

-$100

$0

$100

$200

Systemwide Federal

Gov't

State and

Local Gov't

Private

Payer

Households

Dollars in billions

SA

VIN

GS C

OSTS

Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

4

Chief remaining questions on CER

• Stimulus spending– Priorities for spending at AHRQ and NIH– Secretary of HHS $400 million– Inclusion of cost and/or cost-effectiveness

• CER 2.0– Structure– Governance– Funding– Priority Setting– Research Methods (cost-effectiveness)– Implementation

5

Stimulus spending

• Priorities for spending at AHRQ and NIH– Mix of systematic reviews and prospective studies– Framing of topics as “drug vs. drug” or broader

pathways of care– Studies of health plan policies such as prior

authorization

• Secretary of HHS $400 million• Inclusion of cost-effectiveness

6

Weighing up costs and effects

Cost ($)

Effectiveness

New treatmentmore effective, less costly

New treatmentless effective, more costly

High extra costLow gain

Low extra costHigh gain

7

Why Costs? “Not to consider costs is delusional”

Costs should be considered transparently and always in the context of clinical effectiveness

Without consideration of cost No societal support for explicit cost considerations in clinical

decisions and medical policies

All explicit health plan efforts will be suspect

Continued difficulty negotiating prices in relation to evidence of incremental benefit

Marginal benefit at high price will continue to be a dominant market signal for manufacturers

8

How to do Costs? Carve-out

Commissioned by individual payers, including Medicare

Arms’ length Funded as part of CER stream but function delegated to an allied

yet separate organization

Carve-in Distrust of clinical effectiveness judgments if mixed with costs

More efficient to nest within same effort to generate a systematic review of the clinical evidence

Benefits from the objectivity and transparency of a federal comparative effectiveness initiative to gain broad acceptance

9

Legislation for CER 2.0 Structure

Inside or attached to government vs. independent?

Governance Stakeholders on the Governing Board or only on Advisory Committees?

Funding How much from private health plans and purchasers?

Priority Setting Who and how?

Research Methods Cost-effectiveness yea or nea?

Implementation

10

http://www.politico.com/singletitlevideo.html?bcpid=1155201977&bctid=21157881001

11

How will CE information be used?

• Concerns– Limit access to life-saving treatments just because

of cost• “One-size-fits-all” methodologies and applications to

coverage policies• Cost-effectiveness applied as a strict cut-off for coverage• Cost-effectiveness devalues older, sicker patients

– Put governmental bureaucrats between you and your doctor

– Stifle innovation

12

How CER should be used

• “Too cold”– Dissemination of information to patients and clinicians

• “Too hot”– Direct mandates for “all-or-nothing” coverage decisions

• “Just right”– Providing “guidance” to patients, clinicians, and payers– Application by payers to create value-based tools and

policies in support of optimal care and to ensure best use of every health care dollar

• Patient-clinician decision support• Reimbursement policy• Value-based insurance design• Physician group compensation (P4P)

13

Application of Cost-effectiveness

1. Help identify the least costly alternative among equivalent treatment options

2. Provide some context for the additional cost paid for very marginal clinical benefits

3. Help anchor initial pricing for new technologies in evidence of their marginal (if any) benefit

• Tools– Patient-clinician decision tools– Reimbursement policy– Value-based insurance design– Physician group compensation (P4P) to align incentives

14

For further information:

spearson@icer-review.org

www.icer-review.org