Comparative Effectiveness Could Save Medicare Billions, Study Says

Roxanna Guilford-Blake for HealthLeaders Media, October 7, 2010

The "comparative effectiveness" of different treatments for the same medical condition became a hot-button issue in the healthcare reform debates. But despite federal funding  for research into how to compare various treatments, the Affordable Care Act limits the abilityof the federal government to draw on comparative effectiveness research to determine what can be covered under Medicare. 

Politics aside, using such research to determine how much to pay for newly covered services could yield billions of dollars in savings without threatening patient choice, according to a paper in the October issue of Health Affairs.

"We believe that the time is ripe for Medicare to use comparative effectiveness research to reach a new paradigm of paying equally for services that provide equivalent results. To accomplish this goal, the program's coverage and reimbursement processes would need to be linked from the outset, when the evidence for or against a service's comparative clinical effectiveness would be weighed," Steven Pearson and Peter B. Bach write in their paper, "How Medicare Could Use Comparative Effectiveness Research In Deciding On New Coverage And Reimbursement."

The issue isn't political; it's how Medicare can use evidence to its best advantage, Pearson tells HealthLeaders.

Pearson is president of the Institute for Clinical and Economic Review, an academic comparative effectiveness research and policy program based at the Massachusetts General Hospital's Institute for Technology Assessment. Bach is an attending physician at Memorial Sloan-Kettering Cancer Center in New York City and former adviser to the CMS.

Under their three-pronged approach:

1. Medicare would pay more for interventions that research demonstrates provides superior results for patients.

2. When two interventions demonstrate comparable clinical effectiveness, Medicare would pay the same amount for each.

3. When a new service or treatment lacks any comparative evidence, Medicare would set a tentative payment to allow time for research on its effectiveness. After three years, if there were no clear evidence the new intervention had a clinical advantage, Medicare could reevaluate its payment.

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