Threats to American health care lurk within the stimulus package.
9:30 AM, Jan 29, 2009 • By TEVI TROY
The Democrats' other under-the-radar expansion of government power is in something called "Comparative Effectiveness." In the most basic sense, comparative effectiveness looks at the effect of different options on treating particular medical conditions. This sounds harmless enough, as practitioners should be aware of how effective different treatments are, but it could also be used as a cost-cutting and therefore treatment limiting approach, similar to the approach many European countries use. Comparative effectiveness is still in its infancy, and many questions remain regarding its use, but the stimulus package reveals a heavy reliance on comparative effectiveness that is troubling, to say the least. The Agency for Healthcare (yes, it is one word, per act of Congress) Research and Quality is getting $300 million to pursue comparative effectiveness, a 10-fold increase. And that's not all. The Office of the Secretary at HHS is getting $400 million for this, and NIH is getting another $400 million as well. Giving the money to the Office of the Secretary, which was not the Pelosi-Reid Congress' habit during the previous administration, is an indication that this type of research is likely to be extremely important to the health reform czar's cost control efforts.
The problem with this approach, besides the obvious expense and uncertainty, is the dangers it could pose to the incentives to innovate. Biotech investors are already nervous about the FDA's lengthy and costly approval process, as well as the Center for Medicare and Medicaid Service's coverage decisions, which determine whether or not new products will be paid for at all and how much. The stimulus package's heavy bet on an unproven form of post-market evaluation, which could potentially take away coverage previously granted to products, will make skittish venture capitalists and biotech investors even more gun-shy.
So there you have it. More subsidies for coverage, and expanded government control over medical innovations. These moves come before the new secretary of HHS has even been confirmed. Defenders of the private health care system had best get their game on. The first quarter is almost over.
Tevi Troy is the former deputy secretary of the Department of Health and Human Services.