Comparing Medicine’s Cost and Effectiveness

Two important reports Wednesday offer early hints of the potential impact of a $1.1 billion federal program to compare the medical benefit and the cost-effectiveness of surgeries, medicines and medical devices. The reports — by the Institute of Medicine and the Federal Coordinating Council for Comparative Effectiveness Research – suggest priorities for spending $700 million of the research funds set aside under the American Recovery and Reinvestment Act of 2009.

The reports don’t name particular products or companies, but many of the suggested projects would scrutinize expensive products and services sold by identifiable companies, to wit: biologics for treating auto-immune such diseases as arthritis, now sold by the likes of Abbott Laboratories (ABT), Johnson & Johnson (JNJ) and Bristol-Myers Squibb (BMY); home health programs to prevent falls by older adults, now promoted by the likes of Amedisys (AMED); heart arrhythmia treatments marketed by Medtronic (MDT) and St. Jude Medical (STJ); tests for drug-resitant staph germs, as sold by Cepheid (CPHD); prostate cancer treatment with the Intuitive Surgical (ISRG) robot; drug treatments for attention deficit hyperactivity disorder, as sold by Shire (SHPGY).

The Institute of Medicine’s report also endorses comparing costs of treatments, along with their effectiveness. “The overall value of a strategy can be understood best by considering costs and benefits together,” suggested the institute. The medical products industry bridles at cost-effectiveness scrutiny.

Comparative-effectiveness research has been rare. Companies that sponsor research on new treatments tend to avoid study designs that compare their product to rival products. Scientific journals, meanwhile, have traditionally preferred studies that succeeded, leaving useful information on failed studies unpublicised. The government effort will try to plug holes that aren’t typically addressed by industry-sponsored treatment studies, said an editorial today at the website of The New England Journal of Medicine, written by Drs. Patrick H. Conway and Carolyn Clancy. They are trying to orchestrate the sundry federal research efforts under the Recovery Act, as executives of the Federal Coordinating Council for Comparative Effectiveness Research.

”The goal of randomized efficacy trials is often to prove that a treatment is superior to placebo,” say Conway and Clancy. “But more important questions may be whether the intervention is better than other available interventions for specific populations…”

The Institute of Medicine is part of the National Academy of Science, and is a non-profit group assigned to give the nation independent advice on the big questions in medicine. Before issuing today’s list of 100 suggested priorities for the effectiveness program, the Institute took testimony in March from medical groups, patients and industry. Much of the industry input was predictable.

The association of contract clinical researchers — such as Covance (CVD) — insisted that its members should get a piece of the action, in carrying out the $700 million research program.

In their March testimony, health insurers decried the overprescribing of the anti-clotting drug Plavix from Bristol-Myers for preventing the recurrance of a stroke. Plavix costs $1,500 per year, noted one health insurance trade group, but is only sightly more effective than $15-a-year aspirin. Proton-beam treatment for prostate cancer, as sold by Varian Medical Systems (VAR), costs four times as much as radioactive seed implants, with little evidence for its comparative superiority, said the insurers. New biotech treatments for cancer — the big business at Genentech (DNA) — cost more than $50,000 a year, but only deliver marginal improvements to sick patients. The Blue Cross and Blue Shield Association, meanwhile, urged studies comparing heart disease treatment with drugs as against stents (as sold by Boston Scientific (BSX), J&J and Medtronic) and as against bypass surgery.

The biotech industry’s trade group, in its March comments, warned government researchers of the shortcomings of comparative effectiveness studies. Studies shouldn’t zero in on drugs and biologics, warned the group, and should give them credit for hard to measure benefits like “increased worker productivity” or “reduced caregiver burden.”

Ironically, for a science-based industry, the biotech group seemed to set up an argument against “evidence-based medicine” — the trend in effective medical practice, whereby a doctor chooses treatments based on good scientific studies rather than his isolated hunches about an individual patient. “Imposing rigid practice guidelines,” warned the biotech group, “can interfere with the ability of providers to deliver the most appropriate care for each patient.”

The biotech lobby sounded more concerned, I dare say, about interference with the influence of their sales reps on doctors, when promoting the latest, expensive treatment. The lack of private sector studies of comparative effectiveness is a classic example of “market failure” and a terrific opportunity to muster scientific knowledge in helping the country avoid getting crushed by its medical bills. – by Bill Alpert

Original post

Comments

[derryl:]

Great post! Without cost-benefit information no rational health treatment choices are possible. All decisions become political rather than economic and scientific. Any move to analyse the relative costs and benefits of competing treatments should be very welcome to everyone who buys health treatments, which is all of us.

Jul 01 02:52 PM

[markg:]

1.1 billion to COMPARE benefits and investigate surgical efficacy?

This should be a doctoral thesis, at most. Comparing surgical procedures with the millions of differences in anatomy and surgical skill sets is ludicrous at best, and an idea clearly floated by someone with zero hands on experience.

The problem with health care costs is not the drugs, devices, or doctors. It's the layers of beaurocratic fat. This is the biggest boondoggle in a mis-managed government yet.

Jul 01 11:27 PM

[User 395910:]

In the 90's the pharmaceutical industry set up groups and departments with the intent of demonstrating cost/benefit advantages for its products. The studies were too complicated to implement routinely, too difficult to interpret and had absolutely no payoff in terms of regulatory agency or insurance industry acceptance. Moreover the cost for these programs was prohibitive. The $1.1 billion federal government grant is a drop in the bucket, considering that most outcome trials today cost hundreds of millions of dollars. I don't expect to see many scientifically sound studies to come out of this effort and the results will likely be more smoke than fire. The "screaming" headlines, however, should be entertaining.

Jul 02 09:11 AM

[Doc 224899:]

How about a cost-benefit analysis of money spent on legal services and insurance to protect everybody who does or makes something useful from being sued?

Here's the health-benefit analysis, bonehead: every individual patient seen under unique circumstances with a unique combination of clinical factors, and they received whatever treatment that was deemed best at that time, without the opportunity to do Clinical Monday Morning Quarterbacking. None of the cases is comparable to any other cases unless you make assumptions that discount the importance of multiple factors that clinicians have to take into account and that make each case unique.

Jul 02 11:57 AM

[TinyTim:]

The problem with health care costs is not health insurance or malpractice lawyers or govt bureaucracy or uninsured patients or marginal comparative benefits of meds or procedures. It's capitalism and it's working. These increased dollars are not evaporating, they are paying for all the new research and procedures and meds. This may be excessive and inefficient ("leaving useful information on failed studies unpublicised"), but who's to say what line of research is the next cancer cure before the fact.

Another major factor in health care costs is that many doctors are doing what they went to school for, and I don't mean practice medicine. Also capitalism at work. Read:
www.newyorker.com/repo...

Jul 02 02:56 PM

[bigmoney:]

in other words, health care has long since plucked the low hanging fruit, and is now suffering the law of diminishing returns. Exponentially increasing costs to generate slightly improved quality of life and life expectancy.

Maybe one of these days, with high tech gene splicing, we will all live to be 100 in perfect health, not requiring any expensive medical care. Until that final year of life, where people spend unlimited sums to live to 101.

Jul 03 01:27 PM