Comparative Effectiveness Could Save Medicare Billions, Study Says

"Paying equally for comparable results is a powerful principle, and the model we suggest would allow equal payments to be implemented without uprooting the entire incentive system for innovation," they write.

This "dynamic pricing" model could save Medicare billions of dollars over time, they say, and benefit providers: It offers "not only the prospect of better evidence with which to care for individual patients, but also the beneficial and sobering effect of removing perverse incentives to invest in and deliver services that add to the cost but not the quality of care."

Such an approach would require new legislation and, Pearson and Bach acknowledge, it would undoubtedly be highly contested. Nevertheless, Pearson told Health Leaders he's optimistic that the model he and Bach propose will avoid many of the political problems that beset comparative effectiveness during the debates about reform. "This ultimately will not be a Republican or Democratic question," he says.

"This is not about saying 'no.' It's about saying 'yes, and we will pay you more' or 'yes, and we will pay you same,' or 'yes, and we will give you benefit of the doubt for [three years] to stimulate innovation.'"

The article is one of several in the October issue of Health Affairs that examine comparative effectiveness research. The issue is funded by the National Pharmaceutical Council, the WellPoint Foundation, and the Association of American Medical Colleges.

See also:

Federal Panel Hears Advice, Concern About Comparative Effectiveness Research Efforts

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