Comparative Effectiveness

The latest CBO estimate is that the Senate health reform bill will save $118 billion in the first decade -- and more in the second ten years. Paul Krugman explains why savings estimates, rather than being as ephemeral as reform foes maintain, are actually probably too conservative. We'll save more. And Stuart Altman and Robert Mechanic of Brandeis in a recent New England Journal essay explain how some of the new tools Medicare would have would actually work.

Krugman (who seems certifiably if uncharacteristically cheerful about the likelihood of reform) writes:

There’s good reason to believe that all such estimates are too pessimistic. There are many cost-saving efforts in the proposed reform, but nobody knows how well any one of these efforts will work. And as a result, official estimates don’t give the plan much credit for any of them. What the actuary and the budget office do is a bit like looking at an oil company’s prospecting efforts, concluding that any individual test hole it drills will probably come up dry, and predicting as a consequence that the company won’t find any oil at all -- when the odds are, in fact, that some of the test holes will pan out, and produce big payoffs. Realistically, health reform is likely to do much better at controlling costs than any of the official projections suggest.

Picture this. You have two choices for insurance at your job at an Oregon steel mill. One is the traditional model we are all familiar with (those of us who get decent insurance through our jobs, at least, are familiar with it). The other one is value-based insurance. There will be no premiums and it will provide inexpensive care for chronic diseases -- asthma, congestive heart failure, diabetes, depression, heart disease, chronic bronchitis or emphysema. But if you need -- or want -- pricier and often overused procedures like heart bypasses or hysterectomies, you will pay more.

Julie Appleby writes in USA Today/Kaiser Health News:

The policies are among the first to apply financial incentives on both sides of one important factor driving up the nation's health care tab: The underuse of proven treatments and overuse of certain surgeries and diagnostic tests that may be less valuable.

A few weeks ago, we wrote about a study in JAMA by Dr. Joan Teno of Brown and colleagues that showed for-profit hospitals are much more likely than nonprofits to put feeding tubes into nursing home patients with advanced dementia when they are admitted to the hospital (even though evidence shows that the tubes do not prolong the lives of these patients). We had a chance to chat with Joan (a doctor we have learned a lot from in the past couple of years) in Boston this week at the American Academy of Hospice and Palliative Medicine conference.

She put all her data up on a website (LTCFocus.org) for the hospitals -- and anyone else for that matter -- to look at. Several of the hospitals have called her. Her data can’t be right, they insist. They don’t put in that many PEGs (percutaneous endoscopic gastrostomy).

What is comparative effectiveness research?

Nearly a third of health spending provides no added clinical value to patients. Half or less of what physicians do is backed up with valid scientific evidence. On average, patients get the recommended care just over half the time.

For health policy wonks, these facts are well accepted and treated as crucial components to the case for health reform. But for average Americans, many of these figures would come as a surprise according to recent polling done by the Campaign for Effective Patient Care, in conjunction with Lake Research Partners.

The findings are compiled in a report written by our colleague, Shannon Brownlee, a fellow at New America and the author of the excellent book on our health care system: Overtreated.

The poll surveyed 800 Californians who voted in the last year's election. A brief summary of the findings is available here and toplines are available here. Below are some of the highlights that caught our attention:

Leif Wellington Haase, the director of New America's California Program and the author of "A New Deal for Health: How to Cover Everyone and Get Medical Costs Under Control," shares his thoughts in this Sunday's New York Times Magazine article on health care spending and rationing.

When it comes to health benefits, what is most important to you? Are there certain benefits that are absolutely necessary? Are there some that you could do without?

That's exactly what the Center for Healthcare Decisions wanted to know. They recently released the report "What Matters Most: Californians' Priorities for Healthcare Coverage."

Understanding public priorities for health care benefits is a big deal for lawmakers. Currently, Congress is charging ahead toward health care reform, and figuring out how to design minimum benefit standards for health plans is part of their agenda. A minimum benefits package will make sure Americans have insurance that means something, that they will get the care they need, not a bunch of runarounds and denials of coverage. One way lawmakers can connect with American values on health care is to understand what the American people want in their health benefit package.

When she spoke to us at the Health CEOs for Health Reform event recently, Merck's Senior Director of Public Policy, Jane Horvath, presented her response to two very important questions. Why does Merck, one of the world's largest pharmaceutical companies, believe that delivery system reforms are possible? And what has Merck done that demonstrates that change is possible?

To learn about Merck's pilot plan to promote value and quality in health care, check out the video below, or keep reading.

Earlier this week, we discussed the Federal Coordinating Council for Comparative Effectiveness Research's recommendations for comparative effectiveness research.

Remember that $1.1 billion in the economic stimulus package (aka the American Recovery and Reinvestment Act) dedicated to comparative effectiveness research?