Stanford Report, November 10, 2004

Medical costs spark discussion

BY MICHELLE L. BRANDT

With health-care costs spiraling ever higher, many experts are questioning how to assess the value of new medical technology. One particular method, known as evidence-based medicine, is growing in popularity, but members of a California Healthcare Policy Forum panel on campus Tuesday warned that it may not be the best approach.

Evidence-based medicine demands that the government and insurers pay strictly for care that has been scientifically proven to be effective. The idea, is not new, said one panelist, Alan Garber, MD, PhD, the Henry J. Kaiser Jr. Professor, noting that the Centers for Medicare & Medicaid Services and insurance companies already do this. Indeed, he remarked, treatments that make it to market have undergone substantial tests and presumably work well.

Still, Garber said, evidence-based medicine doesn’t sufficiently take cost into consideration. Take the Medicare agency’s recent decision to expand coverage of implantable cardiac defibrillators – which cost as much as $30,000 each – to 500,000 patients. “No one with Medicare will say it, but ICDs are not cost-effective in some people,” said Garber. “The federal level doesn’t want to [take this on], and it’s not ready for prime time in the private sector, either.”

Another panelist, Michael Mussallem, chair and CEO of Edwards Lifesciences, voiced a different concern about evidence-based medicine. On paper, the concept sounds great, said Mussallem, but in practice it could stifle innovation. Large companies might have the time and money for the additional studies necessary to win approval, but small companies might not. “Our goal should be to make sure important technology can make it to the marketplace,” Musselman said.

And a third panelist, Jeffrey Rideout, MD, medical director of health policy & benefits at Cisco Systems, noted that when discussing the evaluation of technology it’s important to think about who exactly should do the evaluations. “We have to decide who gets to decide,” said Rideout. “We haven’t done that yet.”

The California Healthcare Institute, which represents the biotechnology and medical-device industries, organized the event.