NCPA - National Center for Policy Analysis

Comparative Effectiveness Research: A Slippery Slope to Health Care Rationing

April 23, 2012

One of the most important goals of health care reform is to slow the runaway growth in health care spending.  Medical care has gradually become more expensive, and this is particularly troubling for those who oversee government-provided health programs such as Medicare and Medicaid, says Kathryn Nix of the Heritage Foundation.

The growth of this spending is likely to only become more severe with the passage of the Patient Protection and Affordable Care Act (PPACA), which will add millions to government enrollment sheets.

  • The United States spent 17.6 percent of its gross domestic product (GDP) on health care in 2009.
  • This figure is projected to rise to 20 percent of GDP by 2020.
  • Medicare's cost accounted for 3.7 percent of GDP in 2011 and is growing faster than any other area of federal spending.
  • One reason for Medicare's ballooning cost is its fee-for-service structure, which rewards providers for quantity of services and offers little incentive for patients to lower costs.

As a part of its goal to limit this spending growth, the PPACA has established the Patient-Centered Outcomes Research Institute (PCORI) -- an institution that would conduct comparative effectiveness research.  This research would compare treatment options and establish which choices are relatively cost-effective.

While this sounds admirable in theory, consumers should be wary of the mandate provided to the PCORI.  Specifically, cost-effectiveness recommendations can quickly turn into medical care rationing as a body that is charged with limiting spending becomes autocratic.  The experience of Britain's health care system is instructive in this regard.

  • Britain's National Health Service offers health coverage to all British citizens and determines which treatments will be covered and paid for, and under which circumstances.
  • The National Institute for Health and Clinical Excellence (NICE) is charged with making these decisions, incorporating cost-effectiveness and the limitations of fiscal resources.
  • By NICE rulings, British patients have been refused effective treatments for several conditions because of cost.
  • This included coverage for fingolimod, a promising new medicine shown to reduce relapses and delay disease progression in multiple sclerosis patients.
  • PCORI could essentially become the NICE of the United States.

Source: Kathryn Nix, "Comparative Effectiveness Research Under ObamaCare: A Slippery Slope to Health Care Rationing," Heritage Foundation, April 12, 2012.

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