November 11th, 2009
Why not pay for what works?
In all the hullabaloo over health reform, Charles Silver and David Hyman write at The Health Care Blog, a key point of cost control has been lost.
Paying only for what works.
Silver and Hyman are law professors, not doctors. They point to a RAND Corp. study saying that “one-third or more of all procedures performed in the United States are of questionable benefit.” (The illustration is from the study.)
What happened to this simple idea?
The way to enforce it is through comparative effectiveness. Analyze data from millions of patients, develop best practices, and move physicians toward the most cost-effective solution.
This is what every other country does, regardless of how they pay for care. Formularies drive care, based on cost effectiveness. Anyone who wants to go outside what works had better have a good explanation. Often, going outside what works is simply forbidden, or patients are told to buy it with their own money.
Isn’t that how you set priorities? Why should governments or insurance companies act differently?
Unfortunately this was one of the first dominoes to fall in the debate. Reform opponents like Betsy McCaughey called this “getting between a patient and their doctor.”
This happened in conjunction with the debate over the Obama stimulus, and the subject was health IT. The purpose of the HITECH Act’s $19.2 billion in stimulus was to collect the data that would drive decisions on what to pay for.
McCaughey’s scare worked. Explicit promises were made not to use comparative effectiveness in any way to deny care, not to use evidence to decide what we should pay for.
The alternative to evidence is politics. Silver and Hyman note that millions of insurance dollars are spent annually on entirely non-medical treatments like Christian Science, but there’s more:
Lobbying from providers and supportive patients explains why many states already mandate coverage of elective services like in-vitro fertilization, massage therapy, and visits to athletic trainers. Concerns about the efficacy and cost-effectiveness of treatments are washed away by a stream of campaign contributions, and sad stories about patients who can only obtain the “necessary” services if the insurer will pay for them.
This is what is wrong with the present system. State regulation of insurance is based on politics, so your coverage includes any procedure that becomes politically powerful in your state. That’s why insurance costs are rising through the roof.
There is nothing wrong with paying for prayer but it’s not medicine, they write. There’s nothing wrong with in-vitro fertilization but it’s optional, not something everyone should have to cover.
Thus, by tossing away evidence as a way to rule-out certain coverages, you pay for a lot of stuff you don’t need.
Silver and Hyman wrote to argue against a politically-motivated individual mandate. Any mandate should be based on science, not politics, and by giving up on comparative effectiveness early in the process, it became impossible to set that standard, either through the federal government or through the states.
If this was Betsy McCaughey’s intent, she is fiendishly clever. Health care will remain a growth industry, because Americans will keep having to pay for stuff that doesn’t work, regardless of whether reform passes or fails.
Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994. See his full profile and disclosure of his industry affiliations.
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| 11/11/09
