Cost-Effectiveness Information: Yes, It's Important, but Keep It Separate, Please!
Authors: Gail R. Wilensky
Journal: Annals of Internal Medicine (2008)

Editorials17 June 2008Cost-Effectiveness Information: Yes, It's Important, but Keep It Separate, Please!FREEGail R. Wilensky, PhDGail R. Wilensky, PhDFrom Project HOPE, Bethesda, MD 20814.Search for more papers by this authorAuthor, Article, and Disclosure Informationhttps://doi.org/10.7326/0003-4819-148-12-200806170-00224 SectionsAboutVisual AbstractPDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissions ShareFacebookTwitterLinkedInRedditEmail In this issue, the American College of Physicians (ACP) makes a series of compelling statements and recommendations about the need for better information on comparative effectiveness if the United States is to make more effective and efficient use of its limited health care resources (1). The term limited seems incongruous when applied to a country that is currently spending $2 trillion on health care, yet I believe that as much as we spend now, we would spend more if resources were not in some way constrained.The ACP agrees with other commentators that the United States needs to invest substantially in a national entity that would generate information on clinical comparative effectiveness and that the scope of this new entity should include the relative clinical effectiveness and safety of any 2 or more medical services, drugs, devices, therapies, or procedures used to treat the same condition. The ACP goes beyond others by recommending that the scope should include cost-effectiveness. It concludes that the United States spends too little on developing comparative effectiveness data; that it fails to coordinate or prioritize the production of comparative effectiveness information; and that its failure to use information on cost-effectiveness affects the ability of payers, physicians, and patients to make effective, informed choices that optimize the value received for health care dollars spent.These conclusions frustrate me. Although I firmly support them, I adamantly oppose the ACP's recommendation that the new entity should prioritize, sponsor, and produce cost-effectiveness information in addition to comparative clinical effectiveness information. 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. Unlike the ACP, I think it is vitally important to keep comparative clinical effectiveness analysis and cost-effectiveness analysis separate from each other.As I have argued elsewhere (2, 3), the use of cost-effectiveness information is more politically contentious and its modeling more technically controversial than comparative clinical effectiveness. 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. I believe that the ACP only partly understands the history of failed attempts to use cost-effectiveness information and substantially overestimates the likelihood that assigning these 2 functions to 1 national program would be successful and sustainable. 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.Don't Confuse Widespread Interest with Acceptance or SupportThe ACP claims that the development and use of comparative clinical information has uniform support. I believe that a substantial constituency, including the Congressional Budget Office, the Medicare Payment Advisory Commission, and members of Congress from both parties, understand the need for better information on comparative clinical effectiveness. However, that support is certainly not uniform, and the development of a properly funded entity devoted to comparative clinical effectiveness information is anything but certain. Until this idea becomes law, it remains just a beautiful but fragile and vulnerable concept. Even then, 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.I am encouraged that some leaders in industry have been reasonably supportive of a new center on comparative clinical effectiveness. The larger pharmaceutical companies have been the most supportive, as long as legislation recognizes the importance of transparency and timeliness in such a center. Smaller pharmaceutical and biotech companies and many of the device companies—which have traditionally relied on smaller, incremental innovations in their products—are much more concerned that such a center might adversely affect their financial futures. Many patient advocates are equally concerned that better knowledge of comparative clinical effectiveness might impede their constituencies' access to innovative products.How Best to Generate and Use Cost-Effectiveness Information?To reiterate, I am not arguing against the importance of cost-effectiveness information. 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. 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. Before the rule could have become final, it would have been necessary to specify and resolve, with the various affected constituencies, decisions about what costs to count, which discount rate to use, from whose perspective, and all of the other controversial issues discussed in the ACP position paper. Whether these difficult issues could have been resolved is unknowable, but it is important to understand that no right answers to these issues have been found—just different perspectives and positions that various groups have taken.My difference with the ACP is not about the importance of doing cost-effectiveness analysis. I do differ by saying that payers, not a national clinical comparativeness program, should do cost-effectiveness analyses—and act on them. The resources required to do cost-effectiveness analyses should not be a stumbling block. Comparative clinical effectiveness information may require randomized clinical trials or new evidence development, which may be costly and time-consuming to produce, but cost-effectiveness analyses are relatively straightforward and inexpensive. Congress could allocate to the Centers for Medicare & Medicaid Services a small portion of the funds that it allocates to pay for the production of comparative clinical effectiveness information, so that the agency could do more cost-effectiveness analyses. The more serious problem would be winning the right for public payers, such as Medicare, to use cost-effectiveness. Private payers can use this type of information now but rarely do so. It also seems reasonable to me for private payers to pay for their own cost-effectiveness analyses.What Next?Having such physician groups as the ACP join the other constituencies pressing for the development of a comparative clinical effectiveness center is vitally important, and I hope they will be strong advocates as legislation reaches the floor of Congress. Payers—especially private payers—would dearly love for such a 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.Gail R. Wilensky, PhDProject HOPEBethesda, MD 20814References1. American College of Physicians. Information on cost-effectiveness: an essential product of a national comparative effectiveness program. Ann Intern Med. 2008;148:956-61. LinkGoogle Scholar2. Wilensky GR. Developing a center for comparative effectiveness information. Health Aff (Millwood). 2006;25:w572-85. [PMID: 17090555] CrossrefMedlineGoogle Scholar3. Wilensky GR. The growing interest in a comparative clinical effectiveness center. Healthc Financ Manage. 2007;61:38-9. [PMID: 17708165] MedlineGoogle Scholar Comments0 CommentsSign In to Submit A Comment Author, Article, and Disclosure InformationAuthors: Gail R. Wilensky, PhDAffiliations: From Project HOPE, Bethesda, MD 20814.Disclosures:Stock ownership or options (other than mutual funds): Cephalon, United Health Group, Gentiva, Quest Diagnostics. Expert testimony: cost-effectiveness analysis. PreviousarticleNextarticle Advertisement FiguresReferencesRelatedDetailsSee AlsoInformation on Cost-Effectiveness: An Essential Product of a National Comparative Effectiveness ProgramAmerican College of Physicians* A Menu without Prices Alan M. Garber How Can Cost-Effectiveness Information Help Control Unsustainable Growth in U.S. Health Care Spending? Neil M. Kirschner , Stephen G. Pauker , and Joseph W. Stubbs How Can Cost-Effectiveness Information Help Control Unsustainable Growth in U.S. Health Care Spending? Arvind R. Cavale How Can Cost-Effectiveness Information Help Control Unsustainable Growth in U.S. Health Care Spending? Robert A. Murden and Eric E. Seiber Metrics Cited byComparative Effectiveness ResearchImproving Health Care Decision Making in the USA Through Comparative Effectiveness Research: The Role of Economic EvaluationExamining the Use of Comparative and Cost-Effectiveness Analyses in RadiologyMonitoring and Evaluation of Health Promotion ProgrammesAustralia’s ‘Fourth Hurdle’ Drug Review Comparing Costs And Benefits Holds Lessons For The United StatesTools for Assessment of Cardiovascular Tests and TherapiesComparative Effectiveness Research: The Experience of the National Institute for Health and Clinical ExcellenceCost, Coverage, and Comparative Effectiveness Research: The Critical Issues for OncologyPriorización de intervenciones sanitarias en función de su efectividad: un paso intermedio en el camino hacia una medicina más eficienteSocial welfare and the Affordable Care Act: Is it ever optimal to set aside comparative cost?Health economic decision-making: a comparison between UK and SpainPrinciples for planning and conducting comparative effectiveness researchAn Introduction to Comparative Effectiveness ResearchComparative Effectiveness ResearchComparative Effectiveness Research under the Patient Protection and Affordable Care Act: Can New Bottles Accommodate Old Wine?A Comparative Effectiveness Analysis of Alternative Strategies to Assess Hypothalamic-Pituitary-Adrenal Axis Function After Microsurgical Resection of Pituitary TumorsAnother Special Relationship? Interactions between Health Technology Policies and Health Care Systems in the United States and the United KingdomCost Effectiveness and Payment PolicyIncentivizing Comparative Effectiveness ResearchHow Medicare Could Use Comparative Effectiveness Research In Deciding On New Coverage And ReimbursementThe Role Of Costs In Comparative Effectiveness ResearchThe Public Wants Information, Not Board Mandates, From Comparative Effectiveness ResearchAn Integrated Evidence Rating to Frame Comparative Effectiveness Assessments for Decision MakersEBM, HTA, and CER: Clearing the ConfusionAHRQ Series Commentary 3: The United States addresses comparative effectiveness but not cost-effectiveness through the Effective Health-Care ProgramEvidenzbasierte Versorgungsempfehlungen zwischen Wissen und AnnehmenThe Policy Debate over Public Investment in Comparative Effectiveness ResearchComparative Effectiveness Research: Medical Practice, Payments, and Politics: the Need to Retain Standards of Medical ResearchComparative Effectiveness Research and Evidence-Based Health Policy: Experience from Four CountriesEconomics and outcome in the intensive care unitComparative Effectiveness Research: The View From the NHLBIHealth Policy and Cost-Effectiveness Analysis: Yes We Can. Yes We Must.John B. Wong, MD, Cynthia Mulrow, MD, MSc, Deputy Editor, and Harold C. Sox, MD, EditorHow Can Cost-Effectiveness Information Help Control Unsustainable Growth in U.S. Health Care Spending?Neil M. Kirschner, PhD, Stephen G. Pauker, MD, and Joseph W. Stubbs, MDHow Can Cost-Effectiveness Information Help Control Unsustainable Growth in U.S. Health Care Spending?Arvind R. Cavale, MDHow Can Cost-Effectiveness Information Help Control Unsustainable Growth in U.S. Health Care Spending?Robert A. Murden, MD and Eric E. Seiber, PhD‘Marginal Medicine’: Targeting Comparative Effectiveness Research To Reduce WasteWhat’s the trade-off between comparative effectiveness and cost–effectiveness analysis?Health economics and prioritising health care 17 June 2008Volume 148, Issue 12Page: 967-968KeywordsDrug therapyForecastingHealth careHealth information technologyLegislationMedical servicesMedicarePatient advocacySafety ePublished: 17 June 2008 Issue Published: 17 June 2008 Copyright & PermissionsCopyright © 2008 by American College of Physicians. All Rights Reserved.PDF downloadLoading ...