1. Comparative Effectiveness Research: Key Issues and Controversies
Consumer-Purchaser Disclosure Project Discussion Forum
May 5, 2009
Steven D. Pearson, MD, MSc, FRCP

2. Background Policy givens:
Unsustainable cost increases
Unexplainable variation in practice patterns
Not enough evidence for decisions about new treatments
International efforts (health technology assessment)
NICE in England
“Comparative Effectiveness”
Stark bill
Baucus bill
American Recovery and Reinvestment Act (ARRA) stimulus bill funding for Comparative Effectiveness Research (CER) 2

3. 10-Year Impact on Spending of a Center for Comparative Effectiveness
Dollars in billions
SAVINGS COSTS
Source: Based on estimates by The Lewin Group for The Commonwealth Fund, 2007.

4. Chief remaining questions on CER
Stimulus spending
Priorities for spending at AHRQ and NIH
Secretary of HHS $400 million
Inclusion of cost and/or cost-effectiveness
CER 2.0
Structure
Governance
Funding
Priority Setting
Research Methods (cost-effectiveness)
Implementation 4

5. Stimulus spending Priorities for spending at AHRQ and NIH
Mix of systematic reviews and prospective studies
Framing of topics as “drug vs. drug” or broader pathways of care
Studies of health plan policies such as prior authorization
Secretary of HHS $400 million
Inclusion of cost-effectiveness 5

6. Weighing up costs and effects
High extra cost Low gain
Cost ($)
New treatment less effective, more costly
Low extra cost High gain
Using the concept of incremental costs and incremental effects we define the cost-effectiveness plane.
We use this to illustrate the relative cost and effect of an intervention compared to some control.
If the intervention lies in the south-east quadrant, it is both less expensive and more effective than the control, and so will be preferred.
In the north-west quadrant, an intervention is more expensive and less effective, and so the control will be preferred.
In the other two quadrants there is a trade-off between cost and effectiveness.
The ICER is illustrated by the slope of a line through the origin and the IE/IC point for an intervention.
Effectiveness
New treatment more effective, less costly

7. Why Costs? “Not to consider costs is delusional”
Costs should be considered transparently and always in the context of clinical effectiveness
Without consideration of cost
No societal support for explicit cost considerations in clinical decisions and medical policies
All explicit health plan efforts will be suspect
Continued difficulty negotiating prices in relation to evidence of incremental benefit
Marginal benefit at high price will continue to be a dominant market signal for manufacturers

8. How to do Costs? Carve-out Arms’ length Carve-in
Commissioned by individual payers, including Medicare
Arms’ length
Funded as part of CER stream but function delegated to an allied yet separate organization
Carve-in
Distrust of clinical effectiveness judgments if mixed with costs
More efficient to nest within same effort to generate a systematic review of the clinical evidence
Benefits from the objectivity and transparency of a federal comparative effectiveness initiative to gain broad acceptance

9. Legislation for CER 2.0 Structure Governance Funding Priority Setting
Inside or attached to government vs. independent?
Governance
Stakeholders on the Governing Board or only on Advisory Committees?
Funding
How much from private health plans and purchasers?
Priority Setting
Who and how?
Research Methods
Cost-effectiveness yea or nea?
Implementation

10. http://www. politico. com/singletitlevideo. html

11. How will CE information be used?
Concerns
Limit access to life-saving treatments just because of cost
“One-size-fits-all” methodologies and applications to coverage policies
Cost-effectiveness applied as a strict cut-off for coverage
Cost-effectiveness devalues older, sicker patients
Put governmental bureaucrats between you and your doctor
Stifle innovation
Assume that even when comparative effectiveness research means new head-to-head or other trials, ultimately the information will have to be assessed and put in context with other information for decision-makers. How will that information be used? 11

12. How CER should be used “Too cold” “Too hot” “Just right”
Dissemination of information to patients and clinicians
“Too hot”
Direct mandates for “all-or-nothing” coverage decisions
“Just right”
Providing “guidance” to patients, clinicians, and payers
Application by payers to create value-based tools and policies in support of optimal care and to ensure best use of every health care dollar
Patient-clinician decision support
Reimbursement policy
Value-based insurance design
Physician group compensation (P4P)
Assume that even when comparative effectiveness research means new head-to-head or other trials, ultimately the information will have to be assessed and put in context with other information for decision-makers. How will that information be used? 12

13. Application of Cost-effectiveness
Help identify the least costly alternative among equivalent treatment options
Provide some context for the additional cost paid for very marginal clinical benefits
Help anchor initial pricing for new technologies in evidence of their marginal (if any) benefit
Tools
Patient-clinician decision tools
Reimbursement policy
Value-based insurance design
Physician group compensation (P4P) to align incentives
Assume that even when comparative effectiveness research means new head-to-head or other trials, ultimately the information will have to be assessed and put in context with other information for decision-makers. How will that information be used? 13

14. For further information: spearson@icer-review.org www.icer-review.org