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Authors Tackle Risky Argument to Link Medicare Rates to Comparative Effectiveness Research

By Rebecca Adams, CQ HealthBeat

October 5, 2010 -- Medicare officials should base medical service payments on whether research shows that what they are paying for is an effective treatment for a particular ailment, two policy experts write in the October issue of Health Affairs.

Steven Pearson and Peter Bach also suggest that Medicare could hold off for up to three years on reviewing any new service that is added to the benefit package for which there is no evidence that it is as good as current treatment. Pearson is the founder and president of the Institute for Clinical and Economic Review at Massachusetts General Hospital's Institute for Technology Assessment, which evaluates the comparative effectiveness of medical interventions. Bach, a former top adviser for the Centers for Medicare and Medicaid Services, is a pulmonary and critical care physician.

The authors acknowledge early in the article that their suggestion is volatile.

"Just mentioning Medicare and comparative effectiveness research in the same sentence is enough to raise temperatures in Washington health policy circles," they write. "Those who see this research as a threat to patient choice or provider profits do not want it applied to Medicare. Those who see it as a remedy for the nation's health care ills do not want a politically explosive link to Medicare that might bring down the whole comparative effectiveness initiative."

But Pearson and Bach say that because the growth in Medicare costs need to be controlled, "it seems inevitable that comparative effectiveness research will be considered an important potential tool in this effort."

Pearson's career is founded on using comparative effectiveness research (CER), which is defined in the health care overhaul (PL 111-148, PL 111-152) as "research evaluating and comparing health outcomes and the clinical effectiveness, risks, and benefits of two or more medical treatments, services, and items."

The pair say that even though Medicare does not typically use comparative effectiveness research now in deciding whether to cover a treatment, the agency should incorporate the work. They propose basing payments for a new treatment on whether it is superior, comparable, or inferior to the alternatives. The higher the treatment is rated, the more money Medicare would pay for it.

But they're not suggesting that Medicare apply the same benchmarks to new treatments for the first three years they are in use, unless there is enough evidence to rate them right away. After those treatments are used for three years, CMS would revisit the available evidence and decide whether to continue covering the service and at what rate.

The suggestions for tying Medicare rates to comparative effectiveness research comes despite restrictions in the health care law about how Medicare can use research funded by a new institute, the Patient-Centered Outcomes Research Institute (PCORI), and deep ambivalence among Americans about the use of the data.

The health care law tasks PCORI with ramping up the existing government-funded efforts to study and compare treatments. Within a few years, the institute will have more than $500 million per year to spend on the research. Federal officials are trying to figure out how to incorporate it into the delivery of health care and coverage decisions.

The federal law puts in place a number of restrictions about how U.S. government officials can use the research in coverage decisions for programs such as Medicare and Medicaid, as Stanford University professor Alan M. Garber pointed out in a separate Health Affairs article.

"This may seem like a paradox," Garber wrote. "Concern about the value of health care was one of the most important reasons to pursue health reform."

Garber went on to ask a central question: "How can congressionally-mandated restrictions on the use of such research be reconciled with the need to address issues of value in health care?"

He advocated for a balanced approach. Garber said that, on the one hand, PCORI should not routinely conduct cost effectiveness analyses itself. But on the other hand, he said, the institute "should demand" that the research "include data on use and costs," so that other analysts can use the data to do their own cost effectiveness comparisons. For instance, Garber envisioned that health insurance analysts may want to do so.

The public is generally supportive of the research but wary that government health programs or private insurers might use it to limit their treatment options, according to another article in the Health Affairs issue.

About 62 percent of people surveyed by Yale University political science professor Alan S. Gerber and Eric M. Patashnik, associate dean of politics and public-policy-supported government funding of comparative effectiveness research at the University of Virginia. But only 48 percent would support efforts to "determine whether Medicare and private insurance companies will cover old treatments that doctors have used for some time," and 49 percent would back analyses of whether a treatment is "worth its cost."

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