Statement of Gail Wilensky, Ph.D., Senior Fellow, Project Hope, Bethesda, Maryland

Testimony Before the Subcommittee on Health
of the House Committee on Ways and Means

June 12, 2007

Mr. Chairman and Members of the Subcommittee: Thank you for inviting me here to testify on strategies to increase information on comparative clinical effectiveness.  My name is Gail Wilensky.  I am currently a senior fellow at Project HOPE, an international health foundation that works to make health care available to people around the globe.  I have previously directed the Medicare and Medicaid programs as the Administrator of the Health Care Financing Administration and also chaired the Medicare Payment Advisory Commission.  The views I am presenting here reflect my training as an economist, my experience at HCFA and MedPac and also my membership on a committee established in by AcademyHealth (the professional society for health services research) that considered the placement, structure and financing of comparative effectiveness research.  My testimony today, however, reflects my personal views and not necessarily the views of Project HOPE, Academy Health or any other organization.

I am here today to discuss how to develop information on comparative clinical effectiveness (CCE) through the creation of a new Center for Comparative Clinical

Effectiveness.  My testimony includes an article I wrote that was published on-line in Health Affairs last November which lays out my thinking on the fundamental choices regarding the placement, financing and functions of such a center. As a result of the many conversations that I have had about CCE with potential stakeholders, funders and supporters or opponents, my thinking has evolved since the original article. My current views are reflected in the following statement.

Rationale:

In a period when there is little consensus about how to reform American health care, there seems to be a developing consensus on the need for better information on comparative clinical effectiveness.  Driving this interest is the recognition that the current rate of spending growth in health care ( a long term average 2 ½ % annual growth rate in health care faster than the economy) is simply not sustainable and that even with this spending growth, there are clear and persistent indications of problems with patient safety and with quality. 

To be sure, better information will not by itself be enough to moderate spending and maybe not even enough to alter practice behavior.  Changing the incentive structure that faces patients and clinicians, using comparative clinical effectiveness information along with cost data to set reimbursement rates and a whole myriad of other changes will also be needed.  On the other hand, without better information on what works when, for whom, and provided under what circumstances, it is hard to imagine how the U.S. will be able to develop strategies that will allow the country to learn to spend “smarter” and without this, it is hard to imagine how we will lower the longer-term “excess” spending growth rate.

Role of the Center:

The interest in comparative clinical effectiveness information is neither new nor is it limited to the U.S.  Other countries, however, have tended to focus their analyses primarily on pharmaceuticals and devices and their assessments tend to be an important or required element in coverage or reimbursement decisions for their national health systems.

I am advocating for a Center for Comparative Clinical Effectiveness that would have a different focus and serve an information function rather than a decision-making function—both as it may pertain to coverage or reimbursement decisions.  Further, I am assuming that the information would primarily inform better clinical decision-making and help in the design of smarter decisions regarding reimbursement as opposed to setting new requirements for coverage.  These are fundamental and critical differences in roles.

The purpose of the Center on CCE is to fund new research, synthesize existing research, disseminate and otherwise make available what is known about the likely clinical results of using different treatment options for different subgroups of the population.  The focus therefore is on medical conditions rather than on specific interventions or therapeutics and needs to include medical procedures rather than only be limited to pharmaceuticals and devices. It also recognizes that technologies are rarely always effective or never effective (assuming that some time of approval process is required such as the FDA) and that the role of the center is to help inform various decision-makers about the probability that a favorable outcome will occur.  Thus, comparative clinical effectiveness not only provides information that is comparative across various interventions but also recognizes that the outcomes may differ substantially for various subgroups of the population.   Because of the nature of the discovery process and incremental changes that occur over time, it is important to recognize that investment in CCE needs to be thought of as a dynamic process and not once-done, finished forever.

Placement of the Center:

Over the past several months, there has already been a lot of discussion about where such a center should be placed and what kind of data should be included.  In thinking about these issues, it is important to think about the characteristics that the information itself must possess if it is to serve the function envisioned for such a center.  The most important are for the data to be regarded as objective, credible, and transparent—protected from both the political process as well as the interests of affected parties.  The information should also be timely, span the full range of data available and be understandable to the various parties who want to make use of the data but the most important characteristics are those associated with “trust”.  Without that, the center won’t be able to serve its fundamental reason for existing. 

Some have argued the merits of keeping the Center directly within government, with many choosing to house it in the Agency for Health, Research and Quality, AHRQ, the place where the Medicare Modernization Act directed a limited amount of comparative clinical effectiveness analysis to occur.  Others have argued the merits of keeping it outside of a direct involvement with government.  While any placement will have its advantages and disadvantages, on balance the one that is most appealing to me is the use of a Federally Funded Research and Development Center, FFRDC, which is attached to AHRQ.  These are entities that are primarily funded by government (minimum of 70%) and are sponsored by an executive-branch agency, which monitors its use of funds.   There are several that have been around for many years.  The Lawrence Livermore Labs is one of the larger, better known FFRDC’s.  This model best reflects the dictum of “close…but not too close to government” and also assures a close linkage with AHRQ, the lead agency for health services research which needs importantly to continue in that role.  I also think the Center would be most effective if it had both intramural (in-house research) and extramural (contract research) functions as do both AHRQ and the NIH.  The in-house researchers provide an important element of expertise and hands-on experience but my assumption is that much of the work would be contracted out to universities, free-standing research groups, etc.

Governance:

The governance of such a center is almost as important as its placement.  Again, the key concepts are credibility, objectivity and transparency.  This means a governing body that is reflective of all the major stakeholders, with staggered year appointments by the executive branch (and maybe subject to Senate confirmation) so that no one administration has too much control.  Specialized scientific advisory boards would presumably be created for advice on particular comparative effectiveness studies, particularly those involving new research.

Funding:

Like any new entity, a Center for Comparative Effectiveness would require several years to reach a “steady-state” which I have assumed would be several billions of dollars.  Because information is clearly a “public good” as the economist uses the term, my preferred funding would be by direct appropriation, as is the funding for the NIH.  That, however, may not be a realistic strategy.  Another option is to combine funding sources that include monies from direct appropriations, a contribution from the Medicare trust fund and a small assessment on all privately covered lives.  Although all will benefit from the availability of such information, thus the rationale for a direct appropriation, the payers will be especially advantaged by having this information available.

The Role of Costs:

The most controversial issue to date has been whether or not to include cost-effectiveness or cost-benefit analysis directly in a Center for Comparative Clinical Effectiveness.  While I firmly believe the data made available by the Center should be used by payers in doing cost-effectiveness and cost benefit analyses and that funding to CMS should be made explicitly for this purpose, along with the ability of the agency to use such elements in their reimbursement decisions, I believe it is best to keep these functions housed separately.  Payers would be wise to have their C/E and C/B analyses subject to the same criteria of credibility and transparency that are so critical to the acceptance of comparative clinical effectiveness information.  This will be key to their acceptance and credibility although my expectation is that different payers would use the information differently in designing their reimbursement policies.

My rationale for the separation is two fold. One reason is technical.  The concepts and decisions involved with C/E and C/B analysis are more controversial and subject to dispute: where in the life cycle is the technology and how much does that affect costs, whose costs are being measured—Medicare, small purchasers, large purchasers, etc, what functions are or are not absorbed by the purchaser, i.e. is the purchaser wholesale or retail, etc.  In part because of these technical issues but also because of the more controversial nature of the implications of cost analyses, including the perceived threat that could result from these analyses, I believe combining the inclusion of cost analyses, particularly early on, will increase the political vulnerability of a center for comparative political effectiveness and since such information is the most elemental building block to learning how to spend smarter, it needs to be protected.

Finally, to reiterate, the Center for Comparative Clinical Effectiveness would be an information center, not a decision-making center, providing credible information for clinicians, patients and payers to use to make better decisions.  Such information would have many important purposes including the development of a reimbursement system in which co-payments could be tiered to what makes the most sense clinically and economically, informed by credible, objective transparent data.  Patients and clinicians that want more or want to choose differently should be able to do so but should need to pay more for their choices.  Medicare does not currently have such authority in setting reimbursement rates and granting the agency this authority would be one of the many changes that would need to occur in learning to spend smarter under Medicare.