Giving a New Meaning to Evidence-Based Care
David Leonhardt in The New York Times discusses a cost-cutting idea proposed in the latest issue of Health Affairs: Give expensive new treatments three years to prove that they work better than cheaper treatments; barring proof, cut their reimbursement rates to that of the cheapest treatment. Here’s how it would work for prostate cancer:
The options for treating prostate cancer include three forms of radiation. One of them, three-dimensional radiation, costs Medicare about $10,000. Another treatment, a targeted form of radiation known as I.M.R.T., came along a decade ago and initially cost about $42,000. Lately, Medicare has also started covering a third, proton radiation therapy, for which it pays $50,000.
No solid research has shown I.M.R.T. to be more effective at keeping people alive, with minimum side effects, than three-dimensional radiation.
The solution:
After three years, absent evidence that a treatment was better, Medicare would pay no more than it paid for equally effective treatments. Only $10,000 of the bill for proton therapy, for instance.
Here is Austin Frakt on potential problems with this idea. Here is Arnold Kling. Here is Matt Yglesias.
One patient might respond differently than another patient. In addition, research makes incremental steps. A 3-year time horizon is not long enough to establish whether one therapy is better than another.
Today’s ineffective therapy might be an effective therapy a decade from now after doctors learn more about how to administer it. An example is childhood leukemia. Death rates have fallen tremendously in the past 30 years. But many of the drugs remain the same. We have just learned how to use them in a way that works.
Would rationing by some other name be less painful???
This is from a Chris Jacobs’ email:
The Times article quotes the Commonwealth Fund’s approving comments that the proposal would “make the market work.” But there are numerous drawbacks to such an approach:
· Both the Times article and the Health Affairs piece note that three years could prove an insufficient time to gather evidence about a therapy’s worth (or lack thereof) when compared to other treatments. This problem would prove especially acute when analyzing long-term effects of drugs that may not be readily apparent in a few years’ time – or the effects on specific sub-groups (i.e., children, African-Americans, etc.) that may respond differently to treatments.
· Conversely, setting a different “approval time” for each drug or service to justify its use would lead to other inequities – to say nothing of possible political manipulation – and would probably lead to innovators choosing to focus on the fields in which higher Medicare reimbursements would be guaranteed for longer pieces of time.
· The Health Affairs piece admits that this proposed policy “would lead to much slower diffusion of more expensive interventions,” a policy the authors believe is justified because “limiting the rapid dissemination of…a service is likely to be in the best interest of most patients.”
Of particular note – and concern – is a final passage in the Health Affairs piece in which the authors note “our proposed payment model could be incorporated into Medicare processes without running afoul of the language” in the health care law. While it remains to be seen whether the Administration would seek to implement this policy in practice – and whether it would attempt to do so by administrative fiat, rather than through consultations with Congress, as the paper implies Medicare could do – such a new policy would be consistent with Centers for Medicare and Medicaid Services Administrator Donald Berwick’s prior support for “rationing with our eyes open.”
Chris Jacobs
Health Policy Analyst
Republican Policy Committee
(202) 224-2946
I find this a bit scary.