V I E W P O I N T

What is Comparative Effectiveness Research and Why is It Important for Medicare?

Many proposals to reform health care and Medicare call for an expanded role for comparative effectiveness research. The belief is that better information about treatment options - coupled with incentives for doctors and patients to use the information and change their behaviors - could reduce projected levels of health care spending over the long term without hurting, and likely improving, health outcomes.

Health Care Reform and Geographic Variations in Spending

There is a renewed call for health care reform in our country among those who are looking for ways to slow the rate of increase in per capita health spending, cover the over 45 million Americans who are uninsured, make insurance more affordable for individuals and for employers who provide health insurance, and improve the quality of care for which we are paying. Slowing the growth of our nation's health spending, which is expected to double over the next 10 years - from $2.1 trillion today to over $4 trillion - is important for the Medicare program and the federal budget. This is because the growth in Medicare spending, which is 20 percent of total health spending, is due mostly to the increase in per capita health care costs in general and not, as many believe, to the aging of the population.

Research shows that substantial geographic variations in health spending - both within the United States and in comparison with other countries - do not translate into longer life expectancies or improved health outcomes. This indicates that there are opportunities to slow the rate of increase in health spending without adversely affecting patients. This is true for the general population as well as for Medicare, where substantial variations in spending per beneficiary have been documented. For example, a recent report from the Dartmouth Atlas of Health Care provides information on what Medicare spent per beneficiary during their last two years of life while being treated at five top teaching hospitals. According to their findings, costs ranged from an average of $93,000 per patient at the University of California , Los Angeles, to $53,000 at the Mayo Clinic in Rochester , Minnesota .

Comparative Effectiveness Research

Comparative effectiveness research is one option under consideration as a means of reducing health spending in the future while, at the same time, improving the quality of care provided to patients. The Congressional Budget Office (CBO) defines comparative effectiveness research as " ...a rigorous evaluation of the impact of different options that are available for treating a given medical condition for a particular set of patients." In many cases, newer and more expensive medical services may not provide better outcomes than older and less expensive therapies.

Comparative effectiveness research can focus on relative medical benefits and risks only, or on the costs and benefits of different options. And it can compare similar therapies such as drug vs. drug or different therapies such as drug vs. surgery. For example, studies have shown that older, inexpensive drugs for treating high blood pressure are more effective in preventing cardiovascular disease than newer, more expensive drugs; and that two treatments for patients with coronary artery disease - one combining angioplasty with a metal stent and a drug regimen versus a drug regimen alone - did not result in any differences in five-year survival rates due to heart attacks. Comparative effectiveness research is done based on clinical trials, analysis of available studies, and review of claims data. Currently both the federal government and private organizations are doing a limited amount of comparative effectiveness research.

Expanding Comparative Effectiveness Research

Many questions and issues are being considered as part of the debate on expanding comparative effectiveness research, including:

• Should expanded research be done through a federal agency such as the Agency for Healthcare Research and Quality (AHRQ) or the National Institutes of Health (NIH), or through a new public-private agency?

• How should the research be funded? Options include federal appropriations, the Medicare Trust Fund, and a tax on insurance premiums. Many believe that we need both a public and private investment since the results of comparative effectiveness research could benefit all.

• How will the research agenda be set, and how will research be revisited as new advances are made and as long-term results of treatments are learned?

• How will research results be disseminated and/or implemented in order to bring about behavioral changes in providers and patients that will improve the quality of care and reduce costs?

Comparative Effectiveness Proposals and Legislation

Legislation has been introduced in Congress to provide for comparative effectiveness research through a variety of models. It is also supported by the Congressional Budget Office and the Medicare Payment Advisory Commission, and President-elect Barack Obama included a model in the health care reform proposal he put forth as a presidential candidate.

H.R. 3162, the Children's Health and Medicare Protection (CHAMP) Act of 2007 , would create a Center for Comparative Effectiveness Research and establish a Health Care Comparative Effectiveness Trust Fund. Money from fees on private insurance plans and the Medicare trust fund would be used to fund research on the comparative effectiveness of medical procedures and treatments. H. R. 3162 passed the House of Representatives in August 2007 but has not been considered in the Senate.

On July 31, 2008, Senator Baucus and Senator Conrad introduced S. 3408, the Comparative Effectiveness Research Act of 2008 , which would establish a private, nonprofit Health Care Comparative Effectiveness Research Institute governed by a public-private Board of Governors. The Institute would set national research priorities and contract with both federal agencies - such as the Agency for Healthcare Research and Quality (AHRQ) and the National Institutes of Health (NIH) and private researchers to conduct the research. Funding would come from general revenues, the Medicare Trust Funds and fees on private health insurance policies. Senator Baucus has also emphasized the importance of comparative effectiveness research as an important step in improving our health care delivery system in his "Call to Action: Health Care Reform 2009," which he released on November 12, 2008.

The recently-enacted Medicare Improvement for Patients and Providers Act of 2008 (MIPPA), Public Law 110-275, "directs the Secretary of Health and Human Services to contract with the Institute of Medicine (IOM) of the National Academies to identify, and report to the Secretary and Congress on, the methodological standards for conducting systematic reviews of clinical effectiveness research on health and health care in order to ensure that reviewing organizations have objective, scientifically valid, and consistent information on methods." In addition, according to the Congressional Research Service, the legislation "requires the Secretary to contract with the IOM, also, to study and report to the Secretary and the appropriate congressional committees on the best methods used in developing clinical practice guidelines in order to ensure that organizations developing such guidelines have objective, scientifically valid, and consistent information on approaches."

Medicare and Comparative Effectiveness Research

Because of the wide variations in per capita spending on Medicare beneficiaries, experts believe that comparative effectiveness research, facilitated by improved health information technology, could provide a more efficient and high-quality system of care. However, changes in law would be required for Medicare to take effectiveness and cost into account when making coverage decisions; currently, Medicare will generally cover any treatments that are medically necessary. In addition, it is important to keep in mind that there are upfront costs for comparative effectiveness research that might outweigh short-term gains. The benefits of comparative effectiveness research would be long-term and would likely lead to other changes in Medicare that have their pros and cons, such as pay-for-performance and bundled payments for physician services, and increased cost-sharing by beneficiaries for less-effective medical services.

NATIONAL COMMITTEE POSITION

• Comparative effectiveness research has the potential to improve the quality of care patients receive while at the same time slowing the rate of increase in health care spending. An expanded investment in comparative effectiveness research, which includes older Americans, is needed now because it will take time to achieve results that can be put into practice.
  
• Our nation should invest in the expanded use of health information technology which is important for comparative effectiveness research, for example when reviewing claims data and in providing information to providers on efficient and high-quality medical services. ( Health Information Technology )
  
• Congress should reform the way physicians and others providers are paid to avoid the unnecessary overuse of expensive technology and to reward the use of care found to be most effective for certain patients.
  (Improving Practitioner Reimbursement Under Medicare )

Government Relations and Policy, December 2008

The National Committee is a nonprofit, nonpartisan organization that acts in the interests of its membership through advocacy, education, services, grassroots efforts and the leadership of the board of directors and professional staff. The work of the National Committee is directed toward developing a secure retirement for all Americans.