The American Reinvestment and Recovery Act 2009 (ARRA) earmarks more than $800 million toward research on comparative effectiveness of medical treatments. In addition, more than $700 million is directed to the Agency for Healthcare Research and Quality, a research institution with a long history of evaluating effectiveness of treatments. With healthcare reform at the top of the agenda for the 111th Congress and the Obama administration, will a NICE-like entity be part of the reform package?
NICE, the National Institute for Health and Clinical Excellence, makes recommendations on how care, treatments, and medications are distributed through the United Kingdom’s National Health Service (NHS). More than 95% of the healthcare provided in Britain is through the NHS. Prior to NICE, hospitals made decisions about care based upon financial constraints which led to great disparities in care. NICE’s prior approval of drugs and treatments guarantees that all institutions offer the same care options.
Although the use of cost-benefit analysis to evaluate the appropriateness of medical treatments n the United States may seem unique, the state of Oregon first used such an approach more than 15 years ago. The plan’s administrators assembled research panels that reviewed hundreds of treatments, ranked them by benefit and cost, and produced an overall ranking of the treatments for which Medicaid should pay. Estimating the expected demand for each treatment, the administrators then applied the Medicaid budget to the costs of the treatments as ranked, thereby producing a list of approved treatments:
[Budget – (Treatment 1 Cost * Estimated Frequency) – (Treatment 2 Cost * Estimated Frequency) – etc.]
The rejected treatments were those ranked where the budgeted Medicaid funds ran out. Since the list was developed from both cost-benefit analysis and budgeted amounts, many critics of the plan claimed it to be care rationing. Similar cries of foul currently exist in Britain.
Much of the resistance to healthcare reform in Congress and beyond is based on cost concerns. Even though the United States spends more than 30% more per capita on healthcare than any other country, healthcare policymakers struggle to find the sources of revenue to enact reform. The ARRA offers a large sum of money to research the same issues currently investigated by NICE. Perhaps the success of healthcare reform is dependent upon the ability of comparative effectiveness research to show the way to cost savings that can fund the reform.
How the Obama administration intends to apply comparative effectiveness research in future forms of healthcare delivery is unknown. Nevertheless, considering the large investment in this area, it makes sense that at some point it will be offered up as a source of revenue to pay for healthcare reform. This is the only way we can expand access and improve quality without bankrupting our economy and destroying American businesses.
Excerpts from: Is It Time to Play NICE?, PSQH, May/June, 2009