Comparative Effectiveness Research: Key Issues and Controversies Consumer-Purchaser Disclosure Project Discussion Forum

1. Comparative Effectiveness Research:Key Issues and Controversies Consumer-Purchaser Disclosure Project Discussion Forum May 5, 2009 Steven D. Pearson, MD, MSc, FRCP

2. Background • Policy givens: • Unsustainable cost increases • Unexplainable variation in practice patterns • Not enough evidence for decisions about new treatments • International efforts (health technology assessment) • NICE in England • “Comparative Effectiveness” • Stark bill • Baucus bill • American Recovery and Reinvestment Act (ARRA) stimulus bill funding for Comparative Effectiveness Research (CER) 2

3. 10-Year Impact on Spendingof a Center for Comparative Effectiveness Dollars in billions SAVINGS COSTS Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

4. Chief remaining questions on CER • Stimulus spending • Priorities for spending at AHRQ and NIH • Secretary of HHS $400 million • Inclusion of cost and/or cost-effectiveness • CER 2.0 • Structure • Governance • Funding • Priority Setting • Research Methods (cost-effectiveness) • Implementation 4

5. Stimulus spending • Priorities for spending at AHRQ and NIH • Mix of systematic reviews and prospective studies • Framing of topics as “drug vs. drug” or broader pathways of care • Studies of health plan policies such as prior authorization • Secretary of HHS $400 million • Inclusion of cost-effectiveness 5

6. High extra costLow gain New treatmentless effective, more costly Low extra costHigh gain New treatmentmore effective, less costly Weighing up costs and effects Cost ($) Effectiveness

7. Why Costs? • “Not to consider costs is delusional” • Costs should be considered transparently and always in the context of clinical effectiveness • Without consideration of cost • No societal support for explicit cost considerations in clinical decisions and medical policies • All explicit health plan efforts will be suspect • Continued difficulty negotiating prices in relation to evidence of incremental benefit • Marginal benefit at high price will continue to be a dominant market signal for manufacturers

8. How to do Costs? • Carve-out • Commissioned by individual payers, including Medicare • Arms’ length • Funded as part of CER stream but function delegated to an allied yet separate organization • Carve-in • Distrust of clinical effectiveness judgments if mixed with costs • More efficient to nest within same effort to generate a systematic review of the clinical evidence • Benefits from the objectivity and transparency of a federal comparative effectiveness initiative to gain broad acceptance

9. Legislation for CER 2.0 • Structure • Inside or attached to government vs. independent? • Governance • Stakeholders on the Governing Board or only on Advisory Committees? • Funding • How much from private health plans and purchasers? • Priority Setting • Who and how? • Research Methods • Cost-effectiveness yea or nea? • Implementation

10. http://www.politico.com/singletitlevideo.html?bcpid=1155201977&bctid=21157881001http://www.politico.com/singletitlevideo.html?bcpid=1155201977&bctid=21157881001

11. How will CE information be used? • Concerns • Limit access to life-saving treatments just because of cost • “One-size-fits-all” methodologies and applications to coverage policies • Cost-effectiveness applied as a strict cut-off for coverage • Cost-effectiveness devalues older, sicker patients • Put governmental bureaucrats between you and your doctor • Stifle innovation 11

12. How CER should be used • “Too cold” • Dissemination of information to patients and clinicians • “Too hot” • Direct mandates for “all-or-nothing” coverage decisions • “Just right” • Providing “guidance” to patients, clinicians, and payers • Application by payers to create value-based tools and policies in support of optimal care and to ensure best use of every health care dollar • Patient-clinician decision support • Reimbursement policy • Value-based insurance design • Physician group compensation (P4P) 12

13. Application of Cost-effectiveness • Help identify the least costly alternative among equivalent treatment options • Provide some context for the additional cost paid for very marginal clinical benefits • Help anchor initial pricing for new technologies in evidence of their marginal (if any) benefit • Tools • Patient-clinician decision tools • Reimbursement policy • Value-based insurance design • Physician group compensation (P4P) to align incentives 13

14. For further information: spearson@icer-review.org www.icer-review.org