In Britain, a government agency evaluates new medical products for their "cost effectiveness" before citizens can get access to them. The agency has concluded that $45,000 is the most worth paying for products that extend a person's life by one "quality-adjusted" year. (By their calculus, a year combating cancer is worth less than a year in perfect health.)
Here in the U.S., President-elect Barack Obama and House Democrats embrace the creation of a similar "comparative effectiveness" entity that will do research on drugs and medical devices. They claim that they don't want this to morph into a British-style agency that restricts access to medical products based on narrow cost criteria, but provisions tucked into the fiscal stimulus bill betray their real intentions.
The centerpiece of their plan is $1.1 billion of the $825 billion stimulus package for studies to compare different drugs and devices to "save money and lives." Report language accompanying the House stimulus bill says that "more expensive" medical products "will no longer be prescribed." The House bill also suggests that the new research should be used to create "guidelines" to direct doctors' treatment of difficult, high-cost medical problems.
The bill gives incoming Health Secretary Tom Daschle wide discretion to set priorities, and he's long advocated a U.S. approach modeled on the British agency, the National Institute for Health and Clinical Excellence (NICE). Mr. Daschle argues that the only way to reduce spending is by allocating medical products based on "cost effectiveness." He's also called for a "federal health board" modeled on the Federal Reserve to rate medical products and create central controls on access.
Such calculations can't account for all the variation in disease and patient preference that drive medical decisions. So it's no surprise that in Britain there's vocal dissent against NICE constraints, especially among cancer patients who are denied many effective new drugs that, for now, are widely prescribed in the U.S. The rich, of course, are able to opt out of the British controls. But the rest of the country has to appeal to politicians--rather than their doctors--to gain access to restricted medicines.
The biggest flaws in the House Democratic plan aren't just political, they're scientific. Key comparative medical questions usually hinge on when doctors should escalate care to include more invasive measures--not on bare comparisons between otherwise similar technologies, which is the focus of the House proposal.
Conducting worthwhile comparative research is also more expensive than this bill accounts for, since big trials are necessary in order to look for differences between two "active" treatments that work, one perhaps a little better than the other.
This is one reason why the Congressional Budget Office says that government-run comparative effectiveness studies won't actually save much money. Despite this warning, the House still wants to conduct this research and, worse, to do the studies cheaply by adopting less rigorous research methods than what's commonly accepted. The risk is that the conclusions will be flawed and still used to restrict coverage decisions, especially by Medicare.
There's wide agreement that medical practice benefits from comparative research. But there are better ways to generate this information without Washington calling the shots.
Private companies should take the lead in conducting these studies. Yet they have little incentive to do so, since the Food and Drug Administration prevents firms from publicizing most of their findings, even to groups that pay for health care. The FDA should create a safe harbor for claims that medical companies make to expert purchasers (including Medicare) based on the results of comparative studies.
The government should also leverage guidelines promulgated by medical professional societies when Medicare weighs competing technologies. These guidelines are based on systematic, rigorous reviews of available science and are written by leading doctors. They routinely address comparative medical choices. In order to ensure that these societies aren't influenced by drug companies, Congress could push them to adopt principles for transparency as a quid pro quo for having Medicare adopt their work.
But the House plan isn't really about filling evidence gaps--it's about controlling costs. "Science" is merely a veneer.
Scott Gottlieb, M.D., is a resident fellow at AEI.