The Top headline of FDA News Device Daily today read, “Comparative Effectiveness Research has Benefits, Risks Experts Say”. Why would Device Daily consider comparative effectiveness to be risky? Many obvious concerns come to mind. There are distinct risks that the process imposed on the device industry may stifle growth. Worries abound related to the direction policy makers may employ such as when studies will be required (e.g., at the early stages of development, or later in the cycle of real-world experience), how studies will be conducted (e.g., by the government or a public/private entity), who will determine the type, scope, design and rationale for conducting such studies, what the studies will be used for (e.g., to restrict coverage, to control access).

The medical device industry has legitimate reason to worry from the increasing banter of politicians and inexperienced policy makers suggesting that comparative effectiveness controlled by a new government agency will be the silver bullet to manage unbridled utilization of medical interventions. Those experienced in device trial design and commercialization strategies for devices know that the struggle to move new innovation to the patient already takes years driven by inconsistent and irregular evaluative processes imposed by technology assessment authorities in some 3000 private payer health plans, individual hospital technology assessment groups, state Medicaid coverage entities, and Medicare local and national coverage processes. Adding another evaluative process, an entity to conduct comparative evidence research, rightly gives technology manufacturers who are currently subject to multiple assessments reason to question the true utility of another over-arching authority.

To seriously understand why and how procedures are or a technology is properly used (and is it cost-effective?) one must examine how technology use (or underuse) is linked to the payment process. Few policy makers understand the complicated payment system for medical technology that rewards doctors for the most acute, lengthy, or complex procedures performed in the highest priced site of service. Until we correct the arcane formulas that punish any technological advance that is simpler, more efficient, and delinked from physician time, any “comparative effectiveness” study is irrelevant. To recoup the extraordinary costs of development, manufacturers and physicians often have no choice but to seek fair payment through complicated coding processes that are completely disassociated from the true value of a device or procedure.

Innovators need a crystal ball to commercialize. The investor community, who fuels the pipeline of great new technological advances, has serious concerns about how the new comparative effectiveness entity may affect the future, especially the amount of investment it will take to bring something promising to commercialization. New investors, particularly private equity and hedge funds, are likely to severely curtail device investing due to the uncertainty of the expected increased development costs or delays to market.

So, Is comparative effectiveness a rational approach to managing utilization and costs?

Indeed, in principle, we need more and improved information to ensure we are wisely using resources. Randomized controlled trials (the foundation of comparative effectiveness research) have a role in large target populations, where making the wrong recommendation is high. In addition, it is important to model the risk and potential consequences of making the wrong recommendations. Failure to develop a rigorous, systematic approach to evaluating tests and interventions can lead to mistakes—good tests for instance may fail to be adopted, and bad tests may be the norm. Be wary of the manufacturers that argue RCT’s are not feasible under most circumstances. Nonetheless, we need a new paradigm for evaluation that is transparent, independent, rigorous and scalable.

The era of “trust me” science is over. We must more directly rely on the good science and studies generated by the FDA—the pre-IDE process—the very important and time-tested process – and acknowledged as valuable by all parties. Use new study approaches developed at the FDA to inform decision making and increase the rigor and scalability of these methods and apply to “comparative effectiveness” research.

In the words of Henry Waxman, Chairman of the House Energy and Commerce Committee, “We need to compare whether some of these new ideas are really advances or more costly alternatives to what we know will work”. Medical innovators with products that improve patients’ lives passionately embrace proving their worth.

A fair, open, cooperative public/private process, if designed properly will enhance the information needs of patients, physicians, and scientists and eliminate wasteful and ineffective medical technologies and procedures. Implemented without a fix of the payment system, however, the fear that this may stifle access and innovation will be realized.

Thursday night on NBC nightly news, Dr. Tim Johnson said “we’re paying for treatments that have never been proven to work” presuming we’re wasting dollars on dubious medical innovations. He described this within the context of the Obama administrations’ announcement of Tom Daschle as the new Health Care Czar who may establish an independent health care board isolated from health care lobbying “interests” and prioritizing US government spending. Within this context, it will likely adopt some process of comparative effectiveness to evaluate health care interventions. Stuart Altman recently said, “we need to move aggressively forward to develop the capacity of this country to do effective comparative research…the nation cannot afford healthcare that is not supported by evidence of sufficient benefit”.

But what really is comparative effectiveness? Comparative effectiveness in the context of health is as old as “medicine itself”, an implicit and explicit comparison of one medical technique to another. If the intervention works (i.e., understanding positive and negative impacts on patient outcomes), than one may translate this into “economic effectiveness”, or “cost-effectiveness” metrics. In our quest to assess value of medical interventions based on meaningful clinical outcomes, decision makers are using a number of well-established academic methodological approaches.

Is this new? No.
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I believe there are two distinct reasons why medical innovation is threatened in our health care system in the US.

First, I strongly believe that the misaligned payment systems drive inappropriate treatment choices and delivery. This includes differentials in payment by site of service and separate physician payments for procedures that cause inappropriate utilization.

Second, health care policy makers, out of touch with coverage and payment systems, do not truly understand how medical technology fits and is adopted within the framework of coding and coverage systems. It causes manufacturers to force fit new technology into payment and coding systems that have no reflection on true costs or value… To address either explosive volume or costs of a new procedure or service, technology is subject to a threshold of payment and coverage criteria that ultimately causes a true disruption in innovation and dissemination of medical breakthroughs. (more…)

Americans love technology—we will pay almost anything for something that makes communication faster, louder, brighter, or more colorful. We want quick changes and new models, new colors, new brands. In medicine, we demand the same—only the top doctors for our mothers, the best hospitals for our sons, the latest new treatments for our own shaky knees and leaky bladders. We expect it, we demand it. Yet, in medicine, we have a profound tension with balancing cost, risk and newness that translates into enormous policy and political challenges.

For medical technology innovators and physicians that invent and use these tools, we are in the middle of a “policy tug-of-war” that generally comes down to the level of risk we are willing to assume for new treatments. Further, the regulators of medicine assessing the level of risk to the public are besot with too much information vs. too little, with the politics of instant messaging and YouTube clearly influencing how they will ultimately disseminate and manage their decisions equitably.

Our appointed guardians of public safety and risk (the FDA) attempt to monitor new medical therapies and interventions and gather “evidence” knowing that their decisions will affect millions for years, as decisions are rarely intractable in health care. They carefully balance these decisions recognizing that practitioners must have some ability to freely practice to continue to encourage experimentation for the improvement of health in their individual patients.

Having said this, we are now finding that the purchaser is playing an extraordinary role in managing dissemination of care to control escalating costs of providing new innovative interventions. If managing risk through gathering patient evidence works, then of course the regulator (in both private and public sectors) assumes we should logically be able to control costs through the same process. Enter: Evidence-Based Medicine, Coverage with Evidence Requirements, Comparative Effectiveness, Outcomes Research, Cost-Effectiveness Studies, or whatever label you would like to apply to the same fundamental principle: Control Health Care Costs through managing access and volume of services.

As reported in USA Today, critics and proponents of “evidence-based medicine” agree on one thing: It is nearly impossible to remain current on all the latest evidence. Rapid medical innovations are often anecdotal, and when facing a life or death crisis we demand to have anything that would push the envelope to save a loved one. Nonetheless, the budget holders and regulators constantly struggle with maintaining a balance of enough information to allow rapid medical change while at the same time protecting the overall safety of the less-than-perfect medical solutions.

The true problem lies with the budget holder (The Centers for Medicare and Medicaid Services or private payers) using imperfect evidence as a process to control costs and access. Medical innovators are seen as attempting to quickly reach market commercialization at a “risk” to public safety if data are not provided without convincing results. By trying to move technology quickly to the marketplace, this is perceived as “cutting corners” as we negotiate based on the reality that no data will ever completely satisfy the answers related to risk once technology is available outside the investigational settings. We struggle with FDA safety requirements and then are further challenged by each budget stakeholder to provide more evidence as a ubiquitous means to control costs.

In my next post, I will write on Coverage with Too Many Conditions.