Research Restrictions for PCOR
Michael Chernew
June 28, 2010
Restrictions in PPACA
The PatientTh
Patient
P ti t-Centered
C t dO
Outcomes
t
Research
R
h
Institute. . . Shall not develop or employ a
dollars--per
dollars
per--quality adjusted life year (or similar
measure that discounts the value of a life
because of an individual
individual’s
s disability) as a
threshold to establish what type of health care is
cost effective or recommended. The Secretaryy
shall not utilize such an adjusted life year (or
similar measure) as a threshold to determine
coverage, reimbursement, or incentive programs
under title XVIII
Restrictions on use discourage
research
Justifying restrictions
Costs should not be used in decision
making
g
– Really?
Methods are imperfect
– Of course
Imperfect methods will lead to bad
decisions
Our debt is unsustainable
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
Debt /
GDP (%)
100
90
80
70
60
50
40
30
20
10
0
Source: President’s Budget: http://www.cbo.gov/ftpdocs/112xx/doc11231/03-05-apb.pdf
Tax rate implications
PROJECTIONS FOR 2050
SCENARIOS
Tax code is
indexed for
inflation
at o a
and
d
growth in real
income.
Effect on
Economy
Effect on Taxes
1% Gap
Real GDP
reduced by
3% to 16%.
Highest Bracket
(35  60%)
2.5% Gap
Substantial
reductions in
reall GDP
GDP.
Highest Bracket
(35  92%)
Source: CBO. Financing Projected Spending in the Long-Run. July 2007.
Controlling spending
Reduce
R d
((or lilimit
it growth
th of):
f)
– Prices
– Quantities
We know there is variation in spending
and use
– 30% difference in spending between areas at
the 10th and 90th percentiles of the distribution
If we want to control use
use, we want to do so
in the most efficient way possible
Source: Medicare Payment Advisory Committee, March 2010 Report.
Efficiency
By definition, efficiency incorporates
clinical ((and nonnon-clinical)) benefit AND
costs
Maybe we can save enough by eliminating
services that offer no value. I doubt it.
Adjusted Health Expenditures (2-year) by Initial
Treatment Group*
$70,000
$65,380
$60,000
$50 000
$50,000
$40,000
$37,466
$30,000
$20,000
$25,749
$25,100
Radical
prostatectomy
EBRT
$18 435
$18,435
$10,000
$Active surveillance
Brachytherapy
*From analysis of Ingenix claims data, about 2.4 million lives/yr, 3352 localized prostate cancer pts 2004
IMRT
Message 1
At some point decision making has to
incorporate costs
Methodology Concerns
We cannot aggregate easily
– Heterogeneity
g
y
In preferences
In costs
Aggregate data will lead to bad decisions
– Decisions based on averages
Options
Measure
nothing
M
thi related
l t d tto resources
– Can this really be justified?
Measure resources, not costs
Measure costs (or resources)
resources), but do not
aggregate
– Who aggregates?
– How incorporate long term costs?
Aggregate and report, but restrict use of
results
Message 2
We must strive to improve methods and
develop
p acceptable
p
institutions and
processes for decision making
END