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Study: Most of PCORI's Much Larger 2014 Budget Will Go for Systems Research

By John Reichard, CQ HealthBeat Editor

October 28, 2013 -- The money the health law will pump into comparative effectiveness research in 2014 will double the budget of the Patient Centered Outcomes Research Institute to $650 million, dramatically increasing the group's investigations into how to improve the outcomes of medical treatment.

Some of the money will focus on product-to-product comparisons, according to a new analysis by the California Healthcare Institute. But most of it won't, instead paying for studies on how to improve teamwork among doctors, for example, or the ways in which doctors communicate with patients about potential treatments. Insiders refer to such approaches as "systems interventions."

That differs from the original vision many promoters of comparative effectiveness research had for the field—one in which studies would be focused predominantly on investigating which drug, device or other treatment worked best for a particular condition. The two fields—treatment comparisons and system interventions—can work hand in hand, however.

The full funding of PCORI in 2014 is a development most observers haven't noticed when they discuss the big changes coming next year under the health law (PL 111-148, PL 111-152). But it's an important one, analysts say.

"Very few people actually realize what a sea change this is," David L. Gollaher, president of the California Healthcare Institute, said in an interview. The institute describes itself as "the voice of the California biomedical community in Sacramento and Washington, D.C." Its members include biotech, device and diagnostics companies as well as universities.

The findings of the institute's study are the subject of a roundtable discussion to be held this week at the National Press Club. The event is jointly sponsored by the California Healthcare Institute and NEHI, formerly known as the New England Healthcare Institute, a health policy research organization.

The importance of the field to insurers, product manufacturers, and health services researchers is clear from the lineup of speakers at the roundtable, including John Castellani, president of the Pharmaceutical Research and Manufacturers of America. Other speakers include representatives from the insurers Kaiser Permanente and WellPoint; the device maker Medtronic; AcademyHealth, which represents researchers; and the Agency for Healthcare Research and Quality.

PCORI's budget will increase from $320 million in 2013 to $650 million next year because of a surcharge on Medicare premiums and premiums charged by commercial insurers under the health law, the study says. Because of the surcharge, PCORI's budget will remain at that high level and grow incrementally in the years after 2014, Gollaher noted.

"This is an enormous increase in funding in an area that up until 2009 received very little federal funding," he said. The funding jumped that year because of appropriations under the economic stimulus law (PL 111-5). It's increasing so much because of the surcharge. Between 2010 and 2019 PCORI will have between $4.5 billion and $6 billion to spend on comparative effectiveness research, according to the institute's analysis.

PCORI is "going go to be by far the most well funded health technology assessment organization in the world, way beyond what's happening in the U.K., or Germany or France or anywhere else," said Gollaher.

PCORI's research will increasingly shift toward a product focus but Gollaher notes that drug and device makers were successful in reshaping its early agenda away from heavily emphasizing technology assessment. "There was a lot of pushback," he said.

Industry interests "were concerned that a lot of the money would go immediately to health technology assessment, meaning you would look at one device versus another, or drug versus drug comparisons. There was concern that the science wasn't really well characterized or advanced in those areas to produce good analyses.

"What we're seeing is that, in fact, a lot of the money going into PCORI at this point is focused on the patient centered part of it," Gollaher said. "In other words, grants that are going to programs within universities and health systems and so forth to enhance communications between doctors and patients, to get patients more involved in clinical decision-making, things we would describe as health systems interventions.

"Overall PCORI is devoting about two-thirds of its budget to health systems interventions," Gollaher added. About 35 percent goes to study medical interventions. The Agency for Healthcare Research and Quality will spend 91 percent of the about $100 million it will spend in 2014 on comparative effectiveness research looking at medical interventions.

Gollaher defends that makeup of the PCORI portfolio.

"Just imagine that you have some really convincing data about a specific technology or about two drugs against each other," he says. "How do you communicate that information and disseminate it among doctors and clinics? And if it works against something that doctors have been doing, or that patients expect, how do you communicate that to patients in ways that will make that convincing and appealing to them? These are all big deals. There are tons of things that are done or not done in medicine that we know are best practices and aren't followed."

The systems emphasis is "all to the good in laying a groundwork," Gollaher says. As the field moves toward showing the value of certain products or treatments over others, there will be a way to communicate that "within the medical framework for doctors and patients in which there will be more uptake and it will be more relevant."

To the extent PCORI avoids product to product comparisons, it means fewer studies that would have a bottom line impact on drug and device makers. That helps PCORI avoid controversy. But it comes at a cost to consumers who are eager to find out what among various treatment approaches works best for a particular condition.

That isn't to say PCORI isn't funding a considerable body of research comparing treatment options, however. Along with AHRQ, it's committing up to $20 million for research to evaluate the effectiveness of different treatment strategies for uterine fibroids and to better understand patient preference in informing treatment decisions.

Other examples include PCORI-funded studies comparing: three different surgical approaches for degenerative cervical spine disease; drugs to treat strokes; lumbar spine treatments for back pain; different antibiotics to treat respiratory tract infections in children; drugs to treat epilepsy; and medications to treat inflammatory bowel disease.

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