Cost-Effectiveness Needs to be Considered in Health Policy

I read this and just had so much to say, I thought I’d post it.  First of all, cost-effectiveness IS IN THE NEW HEALTH REFORM POLICY.  There is a tax we will be paying, I think it is $2, that will fund this research.

Now, I’m not a fan of cost effectiveness research in general because it usually leads to cutting funding for the elderly.  After all, giving a new heart to a 30 year old will give more benefit in years of life than giving a new heart to a 70 year old.  Strictly looking at cost and years of life, it makes sense.  Looking at the value of human life, it makes no sense.  This article looks at saving the system money by reducing the number of years between pap smears, as an example.  70 days on average vs. 71 days added to life is a tiny difference, but the issue here isn’t becuase insurance covers an annual pap therefore women get it annually rather than every three years, it is becuase in order for a woman to get a prescription for birth control, she must have had a pap within the last year, so his argument subject doesn’t really hold up.

Anyway, if cost effectiveness is going to work, the data has to be REALLY solid.  If women were just getting a pap because insurance paid for it and they were simply taking advantage, I could see this being a good way to save the insurance system money.  An even better way to save the insurance system money would be to use insurance for the UNEXPECTED medical procedures in our lives, rather than something routine, like a pap.  Let’s look at making insurance used as a safety net, rather than as a pre-paid health care program first, then look at possibly lowering medical suggestions, like an annual exam.

I will at least agree that technology in medicine is impacted by reimbursement rates, and reimbursement rates are impacted by cost-effectiveness.

Source: University of Chicago

Cost-effectiveness analysis should play a bigger role in the American healthcare system, argued a University of Chicago researcher Friday at the annual conference of the American Association for the Advancement of Science.

“The effects of science and technology on healthcare costs depend on the policy context in which those technologies are developed and applied,” said David Meltzer, associate professor of medicine, in his presentation, “Policies to Mobile Technology and Science for Health Care Cost Control.”

Meltzer, who also holds a PhD in economics, pointed out that insurance reimbursement policies are especially important in determining which health technologies are developed and how they are used. Currently, national policymakers resist using cost-effectiveness methods, in regards to healthcare and reimbursement, to determine which technologies are developed, he said.

As a result, health care costs are rising as expensive technology and unnecessary tests drive up expenses, he pointed out. Since 1960, healthcare spending has grown 2.5 percent more per year than the rest of the economy, he added.

“Much of the growth comes from the quantity of medical procedures,” he said.

For example, some cholesterol tests for older men and exercise tests for middle-aged men have not been shown to be cost-effective, he pointed out. Additionally, pap smear tests, which women usually undergo annually to detect cervical cancer, could be done nearly as effectively every three years at a great savings.

Research shows that the impact of using pap smear tests every three years increases life expectancy by 70 days at a cost of $500. The same test given annually at a total cost of $1,500 increases life expectancy by 71 days, he pointed out. Under current medical standards, 63 percent of women receive pap smear tests annually, while 18 percent receive them every three years.

“Because technology is the major driver of increases in health care and a critical driver of improvements in health, rigorous methods to assess the costs and effectiveness of health care technology are critical for effective resource allocation,” Meltzer said. By using cost-effectiveness methods in studying healthcare, researchers and policymakers can better understand the value of innovation, he said.

“Cost-effectiveness methods have the potential to address policy questions other than reimbursement policy that can help mobilize technology and science to control health care costs while maximizing health outcomes,” he said.

In addition to being an a faculty member in the Department of Medicine at the University of Chicago, Meltzer is an associated faculty member in the University’s Harris School of Public Policy Studies and its Department of Economics. He is director of the University’s Center for Health and the Social Sciences. The center, founded in 2005, promotes interdisciplinary health research and training initiatives across campus.

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