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We Need to Begin a Conversation about “Cost Effectiveness”     Email    Printer-Friendly
Niko Karvounis, The Century Foundation, 11/5/2007

As any policy-maker knows, catering to public opinion, ensuring the public interest, and managing costs can seem an impossible task—especially when what the public thinks it wants is at loggerheads with what it needs. But in the case of health care, there may be an opportunity to do all three at once according to a proposal in the September/October issue of Health Affairs.

The proposal argues for cost-effectiveness analysis (CEA) “to set priorities for Medicare coverage of new or costly interventions” through a citizens’ council made up of “a cross-section of users” who can provide leadership with “well-considered social-value judgments.” This citizens’ council model is borrowed from the United Kingdom, where a group of thirty men and women advise the National Institute for Health and Clinical Excellence (NICE) on behalf of the public.

The British experience shows that there are likely to be practical complications with implementing a citizens’ council, but it is still an idea that is on the right track. We need to turn “cost-effectiveness” from a bad word into a public interest issue in the United States.

The authors of the proposal, Dr. Marthe Gold from CUNY, Shoshanna Sofaer from Baruch College, and Taryn Siegelberg from CUNY, envision the American citizens’ council as being an advisor to the Medicare Evidence Development Coverage Advisory Committee. The council would advise on the criteria for CEA—in other words, how to decide whether the effectiveness of a new intervention justifies its cost, and thus warrants coverage under Medicare. Issues to be deliberated would include: How should we assess weigh factors such as a patient’s level of suffering or disadvantage, behavioral choices, and age when making a decision? How effective must a treatment be to warrant coverage? Should we give a higher priority to preventions or cures?

These are profoundly difficult questions to answer definitively, particularly for members of the general public who lack medical expertise. As the authors note, information is a major concern—the council needs to know enough to function effectively. 

Unfortunately, striking the right balance between information/education on the one hand and deliberation/autonomy on the other has proven difficult. A 2005 study from the Open University showed that the U.K. citizens’ council has “struggled less than successfully with understanding its role . . . and understanding the questions set.”

The council, caught between being the voice of the people and needing to understand complex health care issues, often lacks the right mix of “knowledge base, role, authority, and the design of the social situation.” It is not always clear where the council fits into the decision-making process, in part because the council is expected simultaneously to learn about issues and comment on them.

Because of these difficulties, NICE pays “more attention to the process than the product [i.e., citizens’ advice] and the way in which that product would be used.” Procedure trumps output. As a result, the citizens’ council is sometimes relegated to “abstract core tasks,” such as issuing general declarations, rather than providing substantive guidance—a pattern that incurred the wrath of patient advocates who called the council a “toothless tiger.”

Anyone who wants to understand twenty-first-century health care faces a steep learning curve. Balancing public input with the expertise and nuance needed to provide meaningful guidance is a tricky business, and the challenge of doing so should not be underestimated.

Still, the U.K. citizens’ council has only been around since 2002, and the Open University report notes that with every installment of the council, more and more kinks are worked out. And even if public input in health priorities represents a challenge, it is by no means a fool’s errand.

Conventional wisdom assumes—without proof, as Gold et al. note—that Americans do not want to discuss health care costs because they view cost-cutting as a synonym for quality-reduction. But the absence of CEA in the United States is due more to a lack of conversation rather than to resistance.

Polling data shows that Americans are ready to talk about cost. Indeed, it is hard to argue that cost is a non-starter when the public views it as the nation’s most important health care problem. Back in 1999, Americans thought AIDS and cancer were bigger concerns, but today it is the cost of health care that keeps Americans up at night. The average American is just as worried about cost as is the policy wonk, making now the perfect time to institutionalize a role for the public in cost management.

Requesting public inputs while setting health priorities can begin to demolish the misconception of “more care is better care” that conflates cost-effectiveness with stinginess. By opening the insular world of cost management to public priorities, we defuse the possibility of Americans viewing CEA as a means to “cheat” them out of care.

Will it be a bumpy ride? Maybe. But if democratizing cost-effectiveness helps the United States move toward smarter, more sustainable health coverage, then it is worth the effort.

Niko Karvounis is a Program Assistant at The Century Foundation.



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