January 16th, 2008
Will comparative effectiveness cut medical market?
For those expecting medical spending to ride out the coming recession, a new Congressional Budget Office study should give you pause.
The study’s conclusion sounds simple and non-controversial:
Better information about the costs and benefits of different treatment options—through research on the comparative effectiveness of those options—could help reduce health care spending without adversely affecting health overall.
The implications are something else again.
As a New York Times editorial notes, medical costs are rising much faster than the population is aging. Health care Medicare and Medicaid are is now 5% of our GDP. When you and I die it will be 10% if present trends continue. And we’re unlikely to outlive our parents by much. [Thanks to Scott Shreeve for the correction.]
The question is, how do you do an effective “comparative effectiveness” study? You don’t know how effective a new technology will be in prolonging healthy living for years. You have to roll it out before you really know.
The CBO report argues that government needs to do these studies. The Children’s Health and Medicare Protection Act of 2007 (passed by the House as H.R. 3162) provides that the AHRQ start taxing insurers $2/head, starting in 2011, for the research.
Here’s a piece of trivia for you. The H.R. 3162 passed in the 107th Congress? The Patriot Act.
Payment rules would not automatically change based on the research results, nor would insurers be forced to accept them.
But if the research indicated a service covered by Medicare provided no comparative benefit, the government would then have the authority to not cover it.
What we’re moving toward is a two-tier health system, basic and premium. Studies like this, whether done by government or insurers, will determine what is basic coverage. If you can afford it, or get insurance for it, adding something else is up to you.
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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| 01/17/08
