Essential Elements of a Technology and Outcomes Assessment Initiative

Abstract

THE MISMATCH BETWEEN US HEALTH EXPENDITURES AND the resources devoted to learning which health interventions are most effective is both striking and unwise. Each year US individuals spend more than $2 trillion on health care. More than $100 billion is spent for research and development and for regulatory approval of new technologies. Yet total spending on technology assessment almost certainly falls short of $1 billion per year— 0.05% of all US health care spending. Some of the $2 trillion in health care expenditures buys services of little or no value. This waste has been attributed to misleading advertisements, media hype, misguided state and federal mandates, fear of malpractice litigation, misaligned reimbursement incentives, and generous insurance that encourages patients to ignore the cost of services. Efforts to curb the inappropriate use of medical technologies, however, can have only limited success unless they address the paucity of reliable information about their benefits, cost, and value. For decades, calls for more systematic assessment of medical technologies and outcomes have gone unheeded. Recently, however, federal legislators and officials have recognized that better information is imperative. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 mandated research on “outcomes, comparative clinical effectiveness, and appropriateness of health care.” The former Medicare administrator, Gail Wilensky, has described alternative structures for a technology assessment organization. Representatives, senators, and presidential candidates have supported legislation to fund comparative effectiveness initiatives. Renewed interest in technology and outcomes assessment efforts can be traced to several factors: disillusionment with traditional cost-containment approaches, deepening anxiety about the safety and effectiveness of drugs and medical care, recognition that little is known about the optimal use of existing diagnostic procedures and treatments, and the explosion in health care expenditures anticipated as baby boomers age. By 2015, the number of US individuals in their 60s—a decade of heavy use of medical care— will increase by nearly 50%. Simultaneously, because of scientific advances, many new technologies will enter clinical practice. The combination of new technologies and greater use of older medical interventions are the fundamental drivers of increasing health care costs. Increasing health care costs have induced employers and insurance companies to shift more financial responsibility onto individuals through “consumer-directed” health plans and health savings accounts. In addition, private health plans, Medicare, and Medicaid are likely to urge hospitals and clinicians to become agents of cost control. Essential to these efforts to enhance quality and lower costs is comprehensive, objective information about the absolute and relative costs and benefits of medical interventions. Technology assessment in the United States has been hampered by pressure and limited resources. In the early 1990s, key federal agencies dedicated to technology assessment, such as the Congressional Office of Technology Assessment, were eliminated. Efforts by other federal agencies are fragmented and underfunded. The Department of Veterans Affairs, the National Institutes of Health, and the Centers for Medicare & Medicaid Services have little money for technology assessment. The mission of the Agency for Healthcare Policy and Research (AHCPR) was technology and outcomes evaluation. But, in 1994, when the AHCPR sponsored research showing that there was inadequate evidence to support commonly performed back operations, its funding was almost eliminated at the behest of disgruntled orthopedic and neurosurgeons and congressional critics of the Clinton health plan. While AHCPR survived, it was chastened. Its name was changed to the Agency for Healthcare Research and Quality and it has generally avoided controversial issues. Most importantly, little of its small budget—$320 million—is dedicated to evaluative research. State and private technology evaluation activities supplement federal efforts. In 1985, the Blue Cross and Blue Shield Association established the Technology Evaluation Center “for assessing medical technologies through comprehen-