Evaluation of medical-technology strategies: effects of coverage and reimbursement (first of two parts)

Challenges and Potential Improvements to Patient Access to Pharmaceuticals: Examples From Cardiology

Patient access to a drug after US regulatory approval is controlled by complex interactions between governmental and third-party payers, pharmacy benefit managers, distributers, manufacturers, health systems, and pharmacies that together mediate the receipt of goods by patients after prescription by clinicians. Recent medication approvals highlight why and how the distribution of clinically beneficial novel therapies is controlled. Although imposed limitations on availability may be rational considering the fiduciary responsibilities of payers and escalating spending on health care and pharmaceuticals, transparency and communication are lacking, and some utilization management may disproportionately affect vulnerable populations. Analysis of the current health insurance landscape suggests mechanisms by which patient access to appropriate medications can be improved and patient and clinician frustration reduced while acknowledging the financial realities of the pharmaceutical marketplace. We propose creation of a shared, standardized, and transparent process for coverage decisions that minimizes administrative barriers and is defensible on the basis of clinical and cost-effectiveness evidence. These reforms would benefit patients and improve the efficiency of the pharmaceutical system.

Comparative effectiveness research under the Patient Protection and Affordable Care Act: can new bottles accommodate old wine?

The Patient Protection and Affordable Care Act (PPACA), as amended by the Health Care and Education Reconciliation Act of 2010, initiated comprehensive health reform for the healthcare sector of the United States. PPACA includes strategies to make the American healthcare sector more efficient and effective. PPACA's comparative effectiveness research initiative and the establishment of the Patient-Centered Outcomes Research Institute are major strategies in this regard. PPACA's comparative effectiveness research initiative is one in a long line of federal initiatives to address the rising costs of healthcare as well as to obtain better value for healthcare expenditures. The key question is whether the governance and design features of the institute that will oversee the initiative will enable it to succeed where other federal efforts have faltered. This Article analyzes the federal government's quest to ensure value for money expended in publically funded healthcare programs and the health sector generally. This Article will also analyze what factors contribute to the possible success or failure of the comparative effectiveness research initiative. Success can be defined as the use of the findings of comparative effectiveness to make medical practice less costly, more efficient and effective, and ultimately, to bend the cost curve.

Technology coverage decisions by health care plans and considerations by medical directors

OBJECTIVES

Decisions made by private health care plans as to whether to cover new medical technology have a significant impact on access, diffusion, and costs. This study describes the variation in health plan coverage of different laser technologies and the types of considerations used in making coverage decisions for them.

METHODS

In a cross-sectional national survey of medical directors at private plans, medical directors indicated current coverage of 15 different laser therapies, and then ranked the top five considerations both in favor and against recommending coverage for three of the laser therapies (angioplasty, discectomy, and photodynamic therapy). The influence of explicit clinical information and/or plan characteristics on coverage and the importance of considerations was examined through multivariate analyses (multiple logistic or linear regression analysis).

RESULTS

Overall, 231 medical directors responded from plans representing 66% and 72% of persons in US health maintenance organization and indemnity plans, respectively. Current coverage for 13 of the 15 laser therapies varied between 20% and 90%. For-profit and indemnity plans covered approximately two more of the different laser technologies than nonprofit plans and health maintenance organizations. Considerations most frequently listed in favor of and against recommending coverage across the three laser technologies were clinical, economic, and regulatory. Legal, competitive, and compassionate concerns were listed less frequently. Considerations were not uniform across laser therapies; they reflected the specifics of the technology under review. Plan characteristics influenced the ranking of considerations as well. For instance, health maintenance organizations were two to three times more likely than indemnity plans to list potential for decreased cost in favor of recommending coverage.

CONCLUSIONS

These findings demonstrate that there is substantial variation in coverage of new technologies, indicating that a large proportion of the population covered by private health plans are ineligible for treatments that are routinely available to others. A greater range of medical therapy may be available for persons enrolled in indemnity and for-profit plans should their physicians choose to prescribe it. Clinical and economic considerations, including cost-effectiveness, predominate in coverage decisions for new technologies. The importance of considerations appears sensitive not only to specific clinical information, however, but also to characteristics of health plans.

EUR-ASSESS Project Subgroup Report on Coverage

The issue of health benefits coverage—and its relation to health technology assessment (HTA)—has gained increasing attention in recent years. Economic constraints on health care, as well as the rapid pace of technological change, have forced European countries to face difficult choices in providing such care. The active use of coverage decision making has been proposed as a tool to help rationalize health care, and HTA has been advocated as a necessary activity to improve coverage decisions.

The review process used by US health care plans to evaluate new medical technology for coverage

OBJECTIVE

To examine the process and information used by medical directors (MDs) of private health plans to make medical coverage determinations for new medical technologies, and to assess the influence of plan characteristics on the process.

DESIGN

Cross-sectional national survey.

PARTICIPANTS

Two hundred thirty-one MDs at private health plans representing 66% and 72% of the US population covered by HMOs and indemnity plans, respectively.

MEASUREMENTS

Actual and optimal review process, final decision authority, sources, and evidence used for technology coverage decisions.

RESULTS

In 96% of plans, MDs take part in the medical policy review process for new technology. However, MDs have final authority over coverage decisions in only 27% of plans. Indemnity plans are more likely to assert that MDs should be responsible for final decisions, odds ration (OR) = 3.3 (95% confidence interval [95% CI] 1.4, 10). Optimal sources of information of new technology were journals, medical society statements or practice guidelines, and opinions of national experts. Actual sources of information used differed from optimal ones; local experts were used more often than is considered optimal (p < .001). For-profit plans were more likely than nonprofit plans to use national experts, OR 2.5 (95% CI 1.3, 5.0), and practice guidelines, OR 5.0 (95% CI 2.5, 10). Randomized trials (94% of MDs) meta-analyses (61%), and reviews (42%) were considered the best evidence for making coverage decisions. Barriers to making optimal decisions were lack of timely evidence on effectiveness and cost-effectiveness, not legal or regulatory issues; HMO, small, and nonprofit plans were two or three times more likely to list lack of cost-effectiveness data than their counterparts (p < .05).

CONCLUSIONS

Although MDs are nearly always involved in the technology evaluation process, a minority of MDs retain final authority over coverage decisions. Evidence from strong scientific research designs is the most frequently cited basis for decisions, but there is need for more timely, rigorous scientific evidence on medical interventions. How a health plan evaluates a new medical technology for coverage varies with identifiable plan characteristics.

Awareness of providers' use of new medical technology among private health care plans in the United States

In a national survey of medical directors at 231 U.S. private health care plans that cover over two thirds of the privately insured population, we studied whether medical directors are aware when a new technology, such as laser therapy, is being used in procedures for which claims are submitted, the factors alerting them to such use, and the factors prompting them to make a specific coverage decision for the technology. We also examined possible associations between health plans' characteristics (HMO versus indemnity, size, profit status, and time in operation) and their medical directors' awareness of the use of technologies, factors alerting medical directors to their use, and factors prompting specific coverage decisions. The majority of plans were generally not aware that laser technology was being used when it was billed under a general billing code, raising the possibility that less effective or less safe technologies could be introduced rapidly into the treatment of insured populations. Nonprofit and older plans were less likely to be aware that lasers were used in some procedures than for-profit and younger plans.

Laser reimbursement: who pays for progress?

Leland Kaiser, a noted health care futurist, asserts that, to the degree to which medical technology can improve human life, there is no limit. Likewise, there is no limit to the amount of money people will be willing to spend on this technology. The ASLMS is at the focal point of the debate and needs to make its voice heard clearly based on a well thought out plan, based on reliable data, and considerate of the various economic, social, legal, and ethical constraints placed on the practicing clinician. If we don't take hold of the process, the technological imperative will quickly overwhelm us.

A consumer-choice health plan for the 1990s. Universal health insurance in a system designed to promote quality and economy (1)

America's health care economy is a paradox of excess and deprivation. We spend more than 11 percent of the gross national product on health care, yet roughly 35 million Americans have no financial protection from medical expenses. To an increasing degree, the present financing system is inflationary, unfair, and wasteful. In its place we need a strategy that addresses the whole system, offers financial protection from health care expenses to all, and promotes the development of economical financing and delivery arrangements. Such a strategy must be designed to be broadly acceptable in our society. To remedy the deprivation, we propose that everyone not covered by Medicare, Medicaid, or some other public program be enabled to buy affordable coverage, either through their employers or through a "public sponsor." To attack the excess, we propose a strategy of managed competition in which collective agents, called sponsors, such as the Health Care Financing Administration and large employers, contract with competing health plans and manage a process of informed cost-conscious consumer choice that rewards providers who deliver high-quality care economically.

Nonexperimental data systems in surgery

This article reviews nonexperimental data bases, emphasizing the present uses and future opportunities of routinely collected information. Data bases are discussed in terms of appropriate research designs. Possibilities for expanding available information through new data collection and through record linkage are stressed. The relationship of nonexperimental data systems to randomized trials and to clinical decision-making is examined.

Health care technology and quality of care

The increasing costs and complexity of technologic advances in diagnosis and treatment have been accompanied by other important issues. They are often moral or ethical in nature; they include the public's desire and determination to have access to these "high-tech" advances; and the quality and equity with which those advances are apportioned and applied must be addressed. Seven criteria that can be applied to technology assessment are identified as is a process for that assessment. Together, these procedures can provide valuable information and assistance to those who make decisions about health benefits coverage--both in the public and the private sectors.

Obstacles to developing and using technology. The case of the artificial heart

For some observers, the artificial heart represents the latest, and perhaps the most flagrant example of the health system's tendency to favor the rapid introduction of expensive but ineffective technologies over efforts to prevent disease and to improve access to care (5;6;19;44;45). Even if it can be perfected, they argue, its opportunity cost in terms of other foregone health benefits would be exorbitant. The ultimate failing of the health care system, it would seem, is its failure to establish mechanisms to select among alternative uses of resources. If such mechanisms had existed, some critics believe that the quest for an artificial heart never would have begun and certainly its premature clinical uses could have been prevented (6;45).

The artificial heart. Costs, risks, and benefits--an update

As discussed above, approximately 32,500 persons aged 55 to 70 years with end-stage heart disease may be potential candidates for the artificial heart each year. However, continued application of a protocol that requires informed consent by the patient effectively limits the pool to 12,000 annually. Estimates of the cost of the artificial heart include charges for the surgical procedure, device and console, and continuing medical surveillance. These estimates range from a low of $100,000 to a high of $300,000 per patient in the initial year. Assuming a five-year, 51% survival and an initial cost of $100,000, total program costs in the fifth year are projected to be $1.3 billion for a pool of 12,000 patients, and $3.8 billion for 32,500 patients. These projected costs are associated with anticipated increases in life expectancy. For those individuals destined to develop heart disease, the anticipated average increase is approximately half a year. In comparison, heart transplant patients who meet the surgical criteria but who do not receive a new heart do not survival beyond six months. In an era of limited resources, it is imperative that such a potentially expensive innovation as the artificial heart be compared carefully with other social and medical programs designed to extend life and improve its quality. Such a comparison will require a full understanding of the likely costs and benefits of the device. A viable artificial heart would greatly alter current treatment for end-stage cardiac disease. More patients would benefit from this therapy than currently benefit from heart transplants, and the costs of caring for these patients would increase substantially. The current state of development of the artificial heart provides an opportunity to collect data on investigational artificial heart performance, clinical results, patient status, and economic and social costs. This knowledge base would be invaluable for future technology assessments and policy decisions regarding third party reimbursement. Insofar as we may be faced with a multi-billion dollar annual investment in the future, detailed assessments of the artificial heart should be performed.

Coverage and reimbursement for heart transplantation

From the perspectives of coverage and reimbursement, heart transplantation has been a serious concern of policymakers in the U.S. since 1980, the year it was decided that a comprehensive study was required before the Health Care Financing Administration (HCFA), the federal agency responsible for the administration of the Medicare program, would be able to decide the status of the procedure (14;15;30;35). It was well acknowledged that the issues surrounding this decision were complex and that initial attempts to resolve the underlying coverage issue seemed to be too narrowly construed. It was at this time that the late Patricia Roberts Harris, then Secretary of the Department of Health and Human Services (DHHS), declared that DHHS would require new technologies to pass muster on the basis of their “social consequences” before “financing their wide distribution” (30). In a very special sense, although not appreciated at the time, a new era of health care technology assessment was ushered in, as Harris proclaimed that the then-conceived study of heart transplantation should serve as the “prototype” of technology assessment.

The cost of underutilization. Percutaneous transluminal angioplasty for peripheral vascular disease

Despite the considerable literature on the overuse of new medical technologies, little attention has been paid to the biologic and monetary costs that may be incurred by underuse. Percutaneous transluminal angioplasty as a treatment for peripheral vascular disease is an example of an important technology that has been underused. Although angioplasty alone is less costly but also less efficacious than surgery, a strategy that combines the two procedures (angioplasty first, then surgery if angioplasty is unsuccessful or if occlusion recurs) is uniformly superior to surgery alone in patients who have lesions for which angioplasty can be considered. From a nationwide perspective, if 40 per cent of all patients with iliac or femoral disease (or both) requiring intervention were treated with the combined strategy, there would be an estimated savings (as compared with surgery alone) of 352 lives and $82 million, as well as an additional 5006 patent limbs. Despite these advantages, the use of angioplasty during the period under consideration (up to 1980) was limited, possibly because of the mechanism of patient triage and the inertial forces that operate when a therapeutic method that appears effective--even if more complex and hazardous than a newer approach--has been widely applied.

Nosocomial infections

Recent developments in the understanding of nosocomial infection in general and nosocomial respiratory infections in particular are elucidated. Although the discussion focuses on aerobic bacteria, data are presented to indicate the growing realization that unusual and newly discovered microorganisms play a significant role in hospital-acquired infections. Strategies for the control or prevention of nosocomial infections are highlighted.

Cost and benefit--a critical issue for hospital infection control. Fifth Annual National Foundation for Infectious Diseases Lecture

New patterns of health care financing have made it essential for infection control practitioners to become familiar with information on cost of nosocomial infection and cost effectiveness ("benefit") of the procedures and devices used to control hospital infection. Even the lowest estimates of cost show the considerable economic impact of nosocomial infection. Studies to date separate control procedures and practices into categories of proven efficacy, likely efficacy, lack of efficacy, and those for which cost of implementation is likely to outweight any benefit that might result. Many procedures and practices have not yet been studied. To survive in a hospital world of limited finances, ICPs will have to make sure that they employ only procedures for which benefit outweighs cost of implementation.