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The Coming Tide of Comparative Effectiveness: Tsunami or Wave of Opportunity?

Comparative effectiveness:

“…comparing two (or more) treatments to determine which is most effective.”

Turkelson CM. “Comparative effectiveness: What’s it all about?” AAOS Now, September 2009.

“…the generation and synthesis of evidence that compares the benefits and harms of alternative methods to prevent, diagnose, treat, and monitor a clinical condition or to improve the delivery of care. The purpose of CER is to assist consumers, clinicians, purchasers, and policy makers to make informed decisions that will improve health care at both the individual and population levels."

Institute of Medicine. Initial National Priorities for Comparative Effectiveness Research, 2009.

A Cost Explosion

With healthcare costs rising to 17 percent of gross domestic product (GDP), Americans are deeply concerned about the relentless spiral of rising costs and insurance premiums. Assuming healthcare spending continues to rise at the historical average of 2.5 percent greater than GDP, by 2050 the highest income tax bracket would be 92 percent in order to finance federal spending.1 Most health economists (81 percent) believe that new treatments and technologies (for example gender-specific implants, PEEK cages, intraspinous spacers) are responsible for the majority of the rise of health care costs.2 If this belief holds true, then limiting the development, adoption and integration of new technologies to those that offer measurable benefit for reasonable cost is the key to curtailing healthcare spending. Federal reform efforts have supported “comparative effectiveness research (CER)” as a cornerstone to set healthcare spending priorities and thus control runaway costs.

The Policy Reaction

The American Recover and Reinvestment Act (ARRA) of 2009 allotted $1.1B for CER to compare "clinical outcomes, effectiveness, and appropriatenessof items, services, and procedures.” The health reform law recently signed by President Obama creates the nonprofit Patient-Centered Outcomes Research Institute. The significant funding appropriation of $10 million for fiscal 2010, $50 million for fiscal 2011 and $150 million for fiscal 2012 ensures that data from CER will assume greater visibility and, most likely, increasingly influence decision-making.

A Few Definitions

The Congressional Budget Office defines CER as a ”rigorous evaluation of the impact of different options that are available for treating a given medical condition for a particular set of patients. Such a study may compare similar treatments, such as competing drugs, or it may analyze very different approaches, such as surgery and drug therapy.” CER’s focus is on comparing clinical outcomes, and cost may or may not be factored into the review. Cost effectiveness analysis (CEA), on the other hand, attempts to establish value by comparing the costs and effects of different health interventions. Benefits are typically shown as an increase in life expectancy or, more commonly, as quality-adjusted life years (QALYs) to account for the effect of illness or treatment on a person’s quality as well and quantity of life. A QALY is a combined estimate that reflects the value a person would place on improved health or the avoidance of side effects of treatment. The more cost effective a treatment, the more QALYs are gained per dollar cost.

Around the Globe

Other developed countries seeking to restrain healthcare costs have taken various steps to assess the comparative value of treatment options. Unlike the U.S., the majority of these countries also have fixed overall budgets for their national health systems, thus results of CER are used to determine coverage and payment for new technologies. Despite this major difference in approach towards overall budgeting between the U.S. and most other nations, the approaches taken internationally may have important lessons for the increased U.S. efforts towards CER.

Perhaps the most prominent agency in the world that assesses comparative effectiveness is the National Institute for Health and Clinical Excellence (NICE), which was established in 1999 as part of the U.K.’s National Health Service (NHS). If NICE approves a drug, device or procedure, the NHS must cover it, but local health authorities make coverage decisions about treatments that NICE has not yet evaluated. To date, NICE has published appraisals of over 100 specific technologies and guidance on the use of about 250 procedures.

France, Germany, Australia and Canada have similar agencies that assess the cost effectiveness of new treatments and technologies, and prioritize national health spending.

Non-government-funded organizations have also become involved in CER. The best known may be the Cochrane Collaboration—a nonprofit that harnesses a network of volunteers who conduct systematic reviews of treatments. Since1993, the Cochrane Collaboration has maintained an accessible database that now contains more than 4,500 reviews.