Bethesda, MD -- The United States should establish a new center for comparative effectiveness information, Gail Wilensky says in a Health Affairs Web Exclusive published today. She suggests that a hybrid public-private structure could be the best way to maximize buy-in for the work of the new organization.
“Finding mechanisms that will help the United States make better coverage and spending decisions is critical,” writes Wilensky, a senior fellow at Project HOPE in Bethesda, in the lead paper of a four-article package. U.S. health care spending far outstrips spending in other developed countries: In 2002, the United States spent $5,267 per capita, compared with only $3,446 per capita in the next-highest-spending country, Switzerland. Yet even with all this spending, the United States does not achieve consistently better outcomes than other nations, and the federal share of health care spending is on pace to claim the same share of the economy in 2045 as the entire federal budget claims today.
The new center Wilensky envisions would not make centralized coverage decisions. Instead, it would “provide an independent assessment of the comparative effectiveness of alternative therapies and procedures,” for use by payers, patients, and providers. The center would fund “prospective trials on key questions for which comparative effectiveness evidence was found missing,” in addition to the systematic reviews of existing research currently performed by the Agency for Healthcare Research and Quality, the Blue Cross Blue Shield Association and other private-sector U.S. organizations, and comparative effectiveness centers in other countries.
Expanding The Reach Of Comparative Effectiveness Analysis
The center would examine evidence related to all types of medical interventions, not just prescription drugs. “Since drug spending accounts for only about ten cents of each health care dollar, the potential payoff for better decision making is even greater in other areas of health care, particularly medical procedures,” Wilensky points out. But because of the rapid rise in prescription drug spending earlier in the decade, and the relatively large out-of-pocket share consumers pay for prescription drugs, U.S. interest in comparative data has focused heavily on pharmaceuticals. The Medicare Modernization Act’s prohibition on using Medicare’s purchasing power to drive down drug costs has also fueled interest in developing comparative effectiveness information for pharmaceuticals, according to Wilensky, who was the administrator of the Health Care Financing Administration -- the predecessor agency to the Centers for Medicare and Medicaid Services -- during the administration of George H.W. Bush.
Structuring The New Center As A Public-Private Partnership
The notion of developing evidence on the comparative effectiveness of medical interventions attracts widespread support across the American political spectrum, among those who support more market-based competition in health care as well as those who support administrative pricing. But leveraging that support into backing for a specific structure for a new comparative effectiveness center will require a careful and detailed balancing act, Wilensky warns.
“The U.S. reliance on a multipayer health system makes the function, placement, and financing of a center for comparative effectiveness more complex, at least politically,” than in countries with more centralized health care financing systems, Wilensky says. “Unless all major payers regard the placement and financing of such a center as being consistent with the production of objective and unbiased data, the information it produces will be of little use.”
Wilensky considers several options for the placement of a comparative effectiveness center. The center could be part of the federal government, either within the AHRQ or elsewhere in the Department of Health and Human Services. Alternatively, the center could be located within the private sector. Each of these options has advantages, but in the end Wilensky opts for a middle ground: “On balance, the placement of a comparative effectiveness center within a quasi-governmental entity seems the most attractive.”
Specifically, Wilensky offers the idea of locating the new center in a type of entity called a “federally funded research and development center.” FFRDCs receive the bulk of their funding from the federal government and are generally sponsored by an agency, which monitors their funds; in this case, a likely choice would be AHRQ, although the new center could also be linked to a newly established board elsewhere in HHS. At the same time, FFRDCs also operate as private, not-for-profit organizations and can accept up to 30 percent of their funding from private sources.
Wilensky calls the idea of structuring a new comparative effectiveness center as an FFRDC “intriguing.” However, she also warns that FFRDCs are still relatively unknown, particularly within the health services world, and that “more attention would need to be given to their administrative complexities or limitations to their use.” If the FFRDC option proves too complex, the Institute of Medicine, particularly in combination with the National Research Council, could also be an attractive quasi-governmental home for a new comparative effectiveness center, Wilensky says.
How Should Public And Private Funds For New Center Be Raised?
The new center would likely receive a mix of public and private funding. On the private side, Wilensky suggests that a small charge “could be assessed on all users, providers, or suppliers of health care services or on health plans.” On the public side, she says that providing the government’s share through the Medicare Trust Fund would be a potentially more stable source of funding than annual appropriations, and would reflect the fact that Medicare would be a major beneficiary of information produced by the center. “This, of course, assumes that Medicare would be empowered to use comparative effectiveness as one of the criteria in setting reimbursement, although now that private-sector entities are administering the Part D drug benefit, better information on comparative effectiveness could produce savings even without additional authority being granted,” Wilensky says.
Perspectives on the Wilensky paper include the following:
Kathy Buto, vice president for health policy, Johnson & Johnson, and Peter Juhn, executive director, health policy and evidence-based medicine, Johnson & Johnson. Buto and Juhn argue that comparative studies should not be used “to limit coverage to the ‘winner’ in a study or as a reason to deny coverage until a head-to-head study is done.” Instead, comparative studies should be used to inform patients and providers about options and to assign “appropriate reimbursement premiums”; such studies could also be “a condition of coverage to accelerate access to promising new therapies.”
Buto and Juhn say that a new comparative effectiveness center should be linked with AHRQ and that “AHRQ’s critical role in sponsoring health services research should be maintained.” Any new center should “seek broad participation from shareholders”; should “operate under transparent processes and methods while still respecting commercial confidentiality”; and should “demonstrate independence from payers.”
Carolyn Clancy, AHRQ director. Clancy points out that research on comparative effectiveness is a means to increasing the value of health care, not an end in itself. “The ultimate goal is timely, relevant information for decision making,” she says. The findings of scientific peer-reviewed articles “diffuse into practice slowly if at all” and are often difficult for consumers, and even clinicians, to interpret.
Like Wilensky, the AHRQ director stresses the importance of transparency in maintaining the trust of manufacturers and others in comparative effectiveness assessments. In AHRQ’s comparative effectiveness work authorized under Section 1013 of the MMA, manufacturers and the public “are notified when a study is begun, are invited to submit relevant studies and data, and have the opportunity . . . to comment on the framing of the specific research questions as well as draft reports.” There is a “growing recognition” that this type of process is more likely to address manufacturers’ concerns than are “private-sector reviews for which the methodologies are considered proprietary information,” Clancy says. Soliciting broad public comments further ensures that the research is relevant and timely.
John Rowe, Mailman School of Public Health and recently retired Aetna CEO, and coauthors. Rowe and coauthors, who are associated with the Institute of Medicine’s Roundtable on Evidence-based Medicine, say that the United States needs a “neutral, trusted central entity of the highest capacity” to supervise comparative effectiveness assessment efforts. They cite several developments in health care that both underscore the importance of accelerating comparative effectiveness research and set the stage for progress. For example, the authors say that the available evidence base is improving, driven by factors such as advances in health information technology and initiatives to aggregate data on provider outcomes across multiple payers. Rowe and coauthors also note that there is “a growing recognition of the importance of certain patient characteristics (such as sex, age, and race/ethnicity) as modulators of the comparative effectiveness of treatments”; they approvingly cite the recent decision by the Centers for Medicare and Medicaid Services “to limit coverage options for vertebral replacement to those few beneficiaries under age sixty, based on how evidence of effectiveness varies by age.”
You can read Wilensky’s article at
You can read Buto and Juhn’s Perspective at
You can read Clancy’s Perspective at
You can read Rowe and coauthors’ Perspective at