When will cost effectiveness ever be acceptable in US healthcare?

Cancer. The Big C. No one wants money to stand in the way of curing a patient.

But real life is messier. Many new treatments for cancer are pricey yet provide only marginal gains over existing therapies in life expectancy and/or quality of life. Forty thousand dollars for a cure is not a real dilemma for policymakers — the same spend for an extra six weeks of life is another story.

In the United States we still pretend cost effectiveness doesn’t matter, even though cost is frequently taken into account implicitly and secretly. Europe in particular has moved past that point, and takes cost effectiveness into consideration in coverage and reimbursement policies explicitly. We’re slowly moving in that direction in the US, too. Call it rationing if you want; as long as it’s understood that BMWs and mansions are rationed, too.

As cost becomes more important, payers, policymakers and physicians need a robust body of research as a basis for decision making. The Tufts Medical Center Cost-Effectiveness Analysis Registry, maintained by the Center for the Evaluation of Value and Risk in Health (CEVR), catalogs over 2000 cost-effective analyses that have been published in the peer-reviewed literature since the mid-1970s. In a recent paper in the Journal of the National Cancer Institute, entitled, When is Cancer Care Cost-Effective? A Systematic Overview of Cost-Utility Analyses in Oncology, CEVR director Peter J. Neumann, ScD and others review 242 cancer-related cost effectiveness papers.

Neumann has been working for years to encourage improvement in cost-effectiveness research. Ten years ago he published a paper examining the quality of oncology-related cancer research. This new paper examines how far things have come since then.

…[A]dherence to recommended methods for conducting and reporting [Cost Effectiveness Analysis] results (e.g., applying a societal perspective, discounting both costs and [Quality Adjusted Life Years], providing a clear presentation of the intervention, comparator and the target population) was high and has somewhat improved over time. During 2002-2007, almost all studies clearly presented the relevant intervention, the comparator, and the target population. The proportion of studies that correctly calculated [Incremental Cost-Effectiveness Ratios] increased from 48% before 1998 to 84% after 2001. Most studies performed a sensitivity analysis to explore uncertainties in cost-effectiveness results, and the proportion of studies that presented a probabilistic sensitivity analysis increased from zero during 1976–1997 to 44% during 2002–2007.

As a member of CEVR’s Executive Advisory Board, I am encouraged by the findings of this study. As cost-effectiveness discussions become socially acceptable in the US and as the government steps up support for cost-effectiveness research, it’s worth noting that we’re not starting from scratch. There’s still plenty of room for improvement, but CEVR and others have laid a solid foundation.

Those who oppose taking cost-effectiveness into account on ideological grounds should be aware that even oncologists care about treatment costs.

David E. Williams is co-founder of MedPharma Partners and blogs at the Health Business Blog.

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  • http://www.MDWhistleblower.blogspot.com Michael Kirsch, M.D.

    Agree. Cost consciousness will only take root when the patient and family have a financial stake in the game. Why we would expect them to not demand expensive, cutting edge care that someone else is paying for?

  • ninguem

    When will cost effectiveness ever be acceptable in US healthcare?

    When it is in THE PATIENT’S INTEREST to be cost-effective.

    As in, health savings accounts. My HSA patients ask cost-effectiveness questions all the time, as it is in their best interests to get the most cost-effective care they can.

    • kirk

      Would a rational agent ever chose money over non-existence? It is the social contract that works here. The individual will graze 1,000,000 sheep on the commons.

  • Brick

    I don’t have enough money in my HSA to cover cancer. I don’t have cancer screening because I can’t afford to have cancer.

  • skepticus

    ninguem is exactly right. The solution is not to employ people with spreadsheets to make decisions for other people. THAT’S Rationing.

    The goal is to allow people to keep as much as possible of their money to make their decisions on healthcare. That’s called the market; that’s called human autonomy and dignity.

  • BD

    >>When it is in THE PATIENT’S INTEREST to be cost-effective.>>

    …and when it is in THE DOCTOR’S INTEREST to be cost-effective. (Fee for service… ugly but true.)

    Many cancer patients would not elect to undergo futile treatment if all oncologists were truthful regarding side effects/quality of life.

    The fact is, however, insurance companies are making these decisions already, much to the dismay of both doctors and patients. Those who are fortunate to have good plans benefit; those with individual plans… not so much.

  • SarahW

    Cost effectiveness is not the goal of medicine. That’s the goal of bean counters and consumers.

    The medical practitioner has a different role, and that’s optimal outcome for a given individual patient, with the patient’s goals of health/risk/cost used to calculate said outcome.

    • asm985

      @SarahW you’re forgetting that medicine is a business and at the end of the day, cost effectiveness is vital to the survival of medicine.

  • http://www.MDWhistleblower.blogspot.com Michael Kirsch, M.D.

    @Sarah, I agree that we should be considering only the patient before us, although other argue that physicians should be mindful of resource use and societal needs also. I do think that we physicians need to target our overutilzation in indiviudal patients, which is a more palatable way for us to address cost consciousness to serve the greater good.

  • BobBapaso

    We could all have health care savings accounts that could cover cancer or anything else, if we could get legislation to allow regular pretax contributions and provide subsidies to those with catastrophic illness from an inheritance tax on those who died with an excess in their accounts. We would have to save less than we now pay in insurance premiums.