Cost-effectiveness wars

John F. P. Bridges, Assistant Professor at Johns Hopkins Bloomberg School of Public Health, a Senior Fellow at the Center for Medicine in the Public Interest and the Founding Editor of The Patient, comments on the new Hanover Consensus and the future of comparative effectiveness.

Here's what he has to say:

 
Peter Pitts’ depiction of the almost ten year old “cost-effectiveness” wars in Germany (See Uncommon Denominator) is just an introduction to the debate over economic evaluation of medicine in Germany, Europe and beyond. While it is commonly believed that Europe had long ago fallen to the dark forces of cost-effectiveness analysis, the German defiance referred to in Peter’s article has highlighted that this is not really the case (and there are plenty more counter examples out there). 

Two key issues central to the German debate over economic evaluation are, (1) what methods constitute “best practice” in the economic evaluation of health care, and (2) what type of evaluation is needed for a system that is based on a combination of employer and private health insurance, albeit a system that is subjected to an increasing government presence – along with calls for major reforms to create (attention Obama-ites) a national health care system.

The Hanover Consensus Group has consistently taken the line that “everyone else is doing it, so why aren’t we?” (Although a cynic might read “other health economists are profiting from it and we want too as well!”) While cost-effectiveness analysis is a regularly accepted rule, it’s wrong to consider it as accepted best practice.  Even for those who herald its use, it is often understood as a “necessary evil”.  Furthermore, in an evidence base world, there has never actually been a technology assessment performed on cost-effectiveness analysis, hence we don’t know if it does or does not lead to better health care investments or lowers overall expenditures. Anecdotal evidence in Ontario indicates that it failed to decrease -- and potentially increased -- the rate of medical inflation following its implementation.  Based on the experience in Australia, cost-effectiveness analysis can decrease total expenditures -- but by delaying reimbursement decisions -- a de facto shortening patent life on drugs – or through the negotiation of major price discount, and not by weeding out bad practice. 

The more subtle point in this debate relates to the compatibility of cost-effectiveness with the German health care system.  Created by Otto von Bismarck at the end of the 19^th century, the system of Social Health Insurance was based on the principles of solidarity and subsidiarity.  While Angela Merkel’s health care reforms have threatened the latter to promote affordability, the Germany health care system remains essentially employer and employee sponsored, with a limited role for government.  Furthermore, the Social Code Book that defines the German health care system calls for efficiency to maximize within each disease state, which is at odds with the “priority setting” approaches (a more genteel way of referring to health care rationing) implicit in cost-effectiveness analysis. 

Having been a regular IQWiG watcher since its inception, I have to congratulate Dr. Kolominsky-Rabas for his efforts in searching for an alternative approach to cost-effectiveness analysis.  While I might not agree with the current approaches presented by Caro and colleagues, I find it refreshing that we are now entertaining alternatives. American policy makers  should not only pay attention to this robust debate in Germany, but should be active participants given that we too might find ourselves with our own version of IQWiG in the near future.