Baucus, Conrad Propose Legislation That Would Create Comparative Effectiveness Institute

Main Category: Health Insurance / Medical Insurance
Article Date: 05 Aug 2008 - 6:00 PDT

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Senate Finance Committee Chair Max Baucus (D-Mont.) and Senate Budget Committee Chair Kent Conrad (D-N.D.) on Friday introduced a bill (S 3408) to create a public-private comparative effectiveness institute, which health care policy experts say is essential to controlling health care costs and covering the uninsured, CQ HealthBeat reports. The institute would function as a not-for-profit private entity, not a federal agency, governed by a public-private Board of Governors, according to Baucus. Congressional Budget Office Director Peter Orszag estimated that the U.S. could save up to $700 billion annually in health spending by identifying treatments that do not produce the best medical outcomes.

The Health Care Comparative Effectiveness Research Institute would be "responsible for setting national priorities" and would contract with NIH, the Agency for Healthcare Research and Quality and private entities to provide peer-reviewed research studies that "answer the most pressing questions about what works in health care," Baucus said.

The institute budget would be $5 million in fiscal year 2009 and increase to $300 million by FY 2013. By 2011 the institute would become an "all payer" system, in which the federal treasury would provide $75 million annually from FY 2011 through FY 2018, private insurers would pay $1 per insured person per year and Medicare trust funds would provide $1 per beneficiary each year.

The 21 members of the institute's Board of Governors would include the secretary of HHS and the directors of AHRQ and NIH. The board's other 18 members, to be appointed by the Comptroller General, would include representatives from three of the following entities: private payers; pharmaceutical, device and technology companies; patients and health care consumers; physicians; and agencies administering public health programs.

A Baucus spokesperson said, "we will work to move the bill this year, but obviously time is very limited," adding, "It is important to start serious discussion on an issue important to consider in the context of health reform."

Support
Karen Ignagni, president of America's Health Insurance Plans, said, "We very much support this notion of a public-private independent organization." Ignagni added that the fees health insurers would have to pay under the bill are "a down payment on the agenda of most stakeholders, which is to get all Americans covered." Ignagni said that the findings would be used to "inform coverage decisions" but that treatments found to be less valuable are likely not to be excluded.

BlueCross and BlueShield Association President Scott Serota said that the BCBS has "long advocated for such an entity," adding that by "promoting comparative effectiveness research ... we can improve quality, value and expand coverage for all."

Opposition
According to CQ HealthBeat, "A research agenda that targets the most costly types of treatments and produces findings that shrinks demand for those treatments may not sit well with individual drug, device and medical professionals affected." Pharmaceutical Research and Manufacturers of America Senior Vice President Ken Johnson said in a statement that the lobby "supports the development and use of high-quality evidence ... for health care decision-making" but added that the research should promote timely access to needed therapies "and avoid denying or delaying patients' access to beneficial care."

Advanced Medical Technology Association CEO Stephen Ubl said that the bill "reflects a number of AdvaMed principles on comparative effectiveness," but that the company believes "safeguards should be included to ensure that the final determination of what treatment option works best for each patient should be made by individuals and their physicians." Ubl added that "research should focus on comparative clinical effectiveness, and not on cost-effectiveness -- which could lead to decision-making that may not be in the best interest of patients" (CQ HealthBeat, 8/1).

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