Commentary

Rationing boards will try to reimburse for treatments with measured benefits and value

Douglas W. Jackson, MD
Douglas W. Jackson

It has been more than a year since the passage of the Patient Protection and Affordable Care Act, and it is becoming more apparent that additional checks are necessary to control escalating health care costs. Realistic cost containment needs a system to measure the value of health care and justify the tax dollars required to subsidize and regulate this newly mandated model. The costs for unlimited access and treatments cannot be a part of any type of sustainable private or public health care system.

Health technology assessment

Some states have made efforts to control the increasing costs of health care. In 2006, Washington established their Health Technology Assessment (HTA) program to help officials make coverage decisions for the state’s Medicaid and employee health care programs. HTA programs existed prior to this action, but Washington’s program was implemented to control and limit the costs to effective medical treatments. Officials attempted to cover needed care, which was documented as effective and was affordable within the confines of the state’s limited budget.

Similarly, President Obama has stated that his reform package will control entitlement health care spending by differentiating between health care that does and does not work. In part, this was the reason why the stimulus program included funding for comparative effectiveness research. The current fledgling comparative effectiveness research and treatment guidelines will be based on randomized trials designed to evaluate treatment results. Future trials are scheduled to include a large number of patients so statistically significant results will be used in the decision-making process of individual patient care. Underlying this methodology is the hope that newly developed guidelines will deliver better health care at a lower cost.

Politically insulated board of experts

To help control current spending trends, the Patient Protection and Affordable Care Act authorized the Patient-Centered Outcomes Research Institute (PCORI) as a non-profit corporation to assist patients, clinicians, purchasers and policymakers in making informed health care decisions. They will do this by providing relevant evidence on how best to prevent, diagnose, treat and monitor diseases and other health conditions. Leah Hole-Curry, JD, the national HTA program director, will oversee this new national comparative effectiveness board.

The act also directs the Comptroller General to appoint up to 15 members to PCORI’s methodology committee. The director of the Agency for Healthcare Research and Quality and the director of the National Institutes of Health, or their designees, will also serve on the committee. As it is designed, the committee will make and review coverage decisions and define their benefits. Theoretically, PCORI will ensure that physicians base their medical recommendations on medical evidence proven for a favorable outcome.

The rationing board has limited methods to control costs. It is not allowed to restrict effective treatments, and cannot increase deductibles, raise taxes or the retirement age. The only way the PCORI will significantly slow or reduce the ballooning health care costs in the United States will be to reduce reimbursement and ration care, as now occurs in Great Britain. The PCORI also has to hope that enough physicians and hospitals do not drop out of the Medicare program. It appears there will be enough providers for the first few years. If there are not enough providers, then alternatives include nationalizing doctors or seeing a two-tier system evolve in the United States.

Potential dangers

While it makes sense to assess which treatments have value, the whole process is very complex. There are concerns that the current proposed solution to control health care costs gives political power to an unelected board. In a sense, the PCORI will play doctor on coverage and allocate resources through price controls better than markets have done.

Some physicians and consumers are worried that once bureaucrats are involved in the interpretation of science, their own preconceived objectives and agendas enter the decision making process. Rationing boards will maintain their own existence and relevance while it takes years to not only obtain the necessary data, but also for the experts to accept the data and make scientific-based denials for coverage.

Another danger is that data is outdated as soon as it becomes available, as is the case with Arizona’s efforts to limit organ transplants. In 2010, approximately 1,750 heart transplants were performed in the United States at an average cost of more than $860,000 and more than 4,700 liver transplants were performed at an average cost of more than $500,000. Arizona officials recently said they would only fund the transplants that have the potential to result in additional longevity and quality of life based on published studies and outcomes. Transplant experts and medical societies, including the American Society of Transplantation and the American Society of Transplant Surgeons, immediately sent a letter to Arizona’s governor stating they were using outdated and misinterpreted data. Critics claim the government was placing a price on life.

Outdated data will always be a basis to challenge this type of decision making. However, in many situations critics are not able to cite specific cost-effectiveness data to support the value of transplants. Researchers have not previously focused on the cost-effectiveness of transplants because of the limited supply of organs. However, now there is the need to add to the data given the limited supply of available money.

Finding ways

We will have to find ways to fund the basic health care needs of our citizens while controlling waste and fraud. Based on the number of comparative effectiveness research currently being funded, there will be more unproven treatments than proven treatments. This will change slowly but will remain a challenge for several decades to come.

We need to be part of the debate in proposed legislation and within our medical societies. New ongoing science and studies will be necessary and the process for acceptance and implementation will impact our patients and how we practice medicine. Funds are limited, and it is realistic to debate why taxpayers should continue to pay for treatments that do not withstand scientific inquiry.

We also need to discuss methods other than science that can be used as the standard in refuting patients from all the health care they want. Our effort to control costs and not sacrifice outcomes will mean we do more of what is proven and less of what is not. When we finally have some agreement on health care budgets, then we can make rational judgments and establish our health care priorities. Now is the time for a meaningful bipartisan debate.

  • Douglas W. Jackson, MD, is Chief Medical Editor of Orthopedics Today. He can be reached at Orthopedics Today, 6900 Grove Road, Thorofare, NJ 08086; email OT@slackinc.com.
Douglas W. Jackson, MD
Douglas W. Jackson

It has been more than a year since the passage of the Patient Protection and Affordable Care Act, and it is becoming more apparent that additional checks are necessary to control escalating health care costs. Realistic cost containment needs a system to measure the value of health care and justify the tax dollars required to subsidize and regulate this newly mandated model. The costs for unlimited access and treatments cannot be a part of any type of sustainable private or public health care system.

Health technology assessment

Some states have made efforts to control the increasing costs of health care. In 2006, Washington established their Health Technology Assessment (HTA) program to help officials make coverage decisions for the state’s Medicaid and employee health care programs. HTA programs existed prior to this action, but Washington’s program was implemented to control and limit the costs to effective medical treatments. Officials attempted to cover needed care, which was documented as effective and was affordable within the confines of the state’s limited budget.

Similarly, President Obama has stated that his reform package will control entitlement health care spending by differentiating between health care that does and does not work. In part, this was the reason why the stimulus program included funding for comparative effectiveness research. The current fledgling comparative effectiveness research and treatment guidelines will be based on randomized trials designed to evaluate treatment results. Future trials are scheduled to include a large number of patients so statistically significant results will be used in the decision-making process of individual patient care. Underlying this methodology is the hope that newly developed guidelines will deliver better health care at a lower cost.

Politically insulated board of experts

To help control current spending trends, the Patient Protection and Affordable Care Act authorized the Patient-Centered Outcomes Research Institute (PCORI) as a non-profit corporation to assist patients, clinicians, purchasers and policymakers in making informed health care decisions. They will do this by providing relevant evidence on how best to prevent, diagnose, treat and monitor diseases and other health conditions. Leah Hole-Curry, JD, the national HTA program director, will oversee this new national comparative effectiveness board.

The act also directs the Comptroller General to appoint up to 15 members to PCORI’s methodology committee. The director of the Agency for Healthcare Research and Quality and the director of the National Institutes of Health, or their designees, will also serve on the committee. As it is designed, the committee will make and review coverage decisions and define their benefits. Theoretically, PCORI will ensure that physicians base their medical recommendations on medical evidence proven for a favorable outcome.

The rationing board has limited methods to control costs. It is not allowed to restrict effective treatments, and cannot increase deductibles, raise taxes or the retirement age. The only way the PCORI will significantly slow or reduce the ballooning health care costs in the United States will be to reduce reimbursement and ration care, as now occurs in Great Britain. The PCORI also has to hope that enough physicians and hospitals do not drop out of the Medicare program. It appears there will be enough providers for the first few years. If there are not enough providers, then alternatives include nationalizing doctors or seeing a two-tier system evolve in the United States.

Potential dangers

While it makes sense to assess which treatments have value, the whole process is very complex. There are concerns that the current proposed solution to control health care costs gives political power to an unelected board. In a sense, the PCORI will play doctor on coverage and allocate resources through price controls better than markets have done.

Some physicians and consumers are worried that once bureaucrats are involved in the interpretation of science, their own preconceived objectives and agendas enter the decision making process. Rationing boards will maintain their own existence and relevance while it takes years to not only obtain the necessary data, but also for the experts to accept the data and make scientific-based denials for coverage.

Another danger is that data is outdated as soon as it becomes available, as is the case with Arizona’s efforts to limit organ transplants. In 2010, approximately 1,750 heart transplants were performed in the United States at an average cost of more than $860,000 and more than 4,700 liver transplants were performed at an average cost of more than $500,000. Arizona officials recently said they would only fund the transplants that have the potential to result in additional longevity and quality of life based on published studies and outcomes. Transplant experts and medical societies, including the American Society of Transplantation and the American Society of Transplant Surgeons, immediately sent a letter to Arizona’s governor stating they were using outdated and misinterpreted data. Critics claim the government was placing a price on life.

Outdated data will always be a basis to challenge this type of decision making. However, in many situations critics are not able to cite specific cost-effectiveness data to support the value of transplants. Researchers have not previously focused on the cost-effectiveness of transplants because of the limited supply of organs. However, now there is the need to add to the data given the limited supply of available money.

Finding ways

We will have to find ways to fund the basic health care needs of our citizens while controlling waste and fraud. Based on the number of comparative effectiveness research currently being funded, there will be more unproven treatments than proven treatments. This will change slowly but will remain a challenge for several decades to come.

We need to be part of the debate in proposed legislation and within our medical societies. New ongoing science and studies will be necessary and the process for acceptance and implementation will impact our patients and how we practice medicine. Funds are limited, and it is realistic to debate why taxpayers should continue to pay for treatments that do not withstand scientific inquiry.

We also need to discuss methods other than science that can be used as the standard in refuting patients from all the health care they want. Our effort to control costs and not sacrifice outcomes will mean we do more of what is proven and less of what is not. When we finally have some agreement on health care budgets, then we can make rational judgments and establish our health care priorities. Now is the time for a meaningful bipartisan debate.

  • Douglas W. Jackson, MD, is Chief Medical Editor of Orthopedics Today. He can be reached at Orthopedics Today, 6900 Grove Road, Thorofare, NJ 08086; email OT@slackinc.com.