By Mike Butler

Most people involved in the healthcare debate acknowledge that if we are going to lower costs, some part of the healthcare services industry – be it doctors, patients, insurance companies or the government – will eventually have to pay attention to them.  The question is which group is in the best position to do this.

The American College of Physicians (ACP), a prominent doctors’ group, stirred debate recently when it released new ethics guidelines that ask doctors to consider cost-effectiveness when deciding on treatment options.  Specifically, the guidelines instruct doctors to be “parsimonious” with their care, both as a way of controlling costs and avoiding overtreatment.  While the word “parsimonious” evoked fears of rationing for some, most experts agree that the guidelines really only call for cost consideration when doctors are faced with two treatment options that stand an equal chance of success.

The ACPs recommendations are not binding rules but are important for the message they send, mainly that healthcare providers should be cognizant of the costs of care.  Encouraging as this may be, there is little evidence that healthcare providers are actually capable of operating in this way, let alone that they would be the most effective agents for controlling total costs.

Dr. Diane Meier, Director of the Center to Advance Palliative Care, commented, “My concern with telling doctors to be more “parsimonious” is that it doesn’t provide physicians and other clinicians with the supports they need to do that, which are systems issues.”  This gets at the idea that doctors simply may not be aware of which treatment is the most effective and least costly; in many cases, the treatments they prefer depend on what they were taught. Meier also points out that doctors have not been trained to manage patients’ expectations, expensive treatment in high volume equates to the best possible care.  Finally, there is the most basic criticism – that doctors feel a psychological pull to do everything that they can to heal their patient, regardless of all other considerations.

Given the uncertainty of how doctors will adopt this new guideline, it makes sense to look elsewhere.  As the largest payer of healthcare in the country, the federal government, through Medicare and Medicaid, could have enormous influence in making sure that patients only get treatments that are evidence-based and cost-effective.  Agencies such as the FDA or the recently created Patient Centered Outcomes Research Institute (PCORI) are specifically designed to generate research aimed at determining what these treatments are.

Throughout this past fall, however, we saw several examples of how the federal government is unwilling or unable to influence policy as quickly or as effectively as other actors within the healthcare sector.

One such example was the case of the anti-cancer drug, Avastin.  In October the FDA officially confirmed an earlier ruling, based on the results of randomized controlled trials, that the drug provided no additional benefit and had a greater risk of harmful side effects than other available treatment options for women with breast cancer.  What’s more, Avastin is considerably more expensive than the alternatives, at $88,000 a year.  Despite this, Medicare will continue to pay for Avastin, for reasons neatly laid out in a column by Joe Nocera of the New York Times.

Medicare will continue to pay for Avastin because they consult the National Comprehensive Cancer Network Drugs and Biologics Compendium, a listing compiled by a board of leading cancer doctors, in deciding what should be covered and what should not be. The majority of these leading cancer doctors said that Avastin is still an appropriate treatment for breast cancer, despite the FDA’s ruling. This system sounds reasonable, and no doubt was designed with the patients’ interests in mind. The problem, as Nocera points out, is that many of the doctors that make the decisions on what drugs are covered are also financially compensated by the companies that make the drugs they are evaluating.

There is some transparency in this process. Board members disclose their financial ties (nine out of thirty two were paid by the maker of Avastin), and the Obama administration recently announced that drug companies will have to make payments to physicians publicly available. These are steps in the right direction.  There is still a good chance, though, that this information will not reach, or even matter, to the average patient.  Many will likely continue to rely on their doctor’s judgment.

Even if you concede that doctors could take money from a drug company while objectively believing its product is the best option for their patients, the response to the Avastin study reinforces an earlier point – are doctors capable of considering costs?  Despite the validity and conclusiveness of the study (patients do not benefit from Avastin) many doctors still say they will continue to prescribe the drug because it works in some patients.  Determining who these patients are beforehand is not yet possible, however.  Until then, all doctors are going to want to believe that their patient is the lucky one, even though the numbers show that he or she probably isn’t.

When you consider the conflicts of interest that doctors face, either financial or sentimental, it’s clear that focusing on provider responsibility is attacking the problem from the wrong angle. Giving more force to the recommendations of impartial government agencies and other groups, such as the FDA and PCORI would have immediate results.  Unfortunately, President Obama’s administration has not shown a willingness to use this kind of power, and I don’t exactly blame them.

The President would have to call for an overhaul of Medicare and Medicaid laws that base payment decisions on doctor-approved compendia. He would have to accept the science-backed recommendations of the FDA, even when they clash with widely-held religious beliefs (see: Plan B being made available over the counter without age restrictions). He would have to do all of this while simultaneously trying to appear as if the government was not interfering in the doctor-patient relationship (which it is, for good reason), in a country where many are more worried about the influence of big government than of big corporations.

That’s a lot to overcome.  But President Obama’s reluctance to use the full power and resources of the federal government as a tool for policy change, for fear of validating his opponents’ accusations, reinforces the conservative argument that the federal government is too large and slow-moving to handle tough issues.

To provide contrast, the private sector responded quickly to the FDA’s ruling on Avastin. Some health insurance companies attempted to stop covering Avastin for breast cancer, and one would hope that a good amount of doctors and patients also opted for different treatment options after being presented with the evidence. These responses were and will continue to be limited, however.  Insurance companies eventually had to reverse course after patients protested that they were being denied necessary care.

Unlike private insurance companies, Medicare and Medicaid do not have to worry about retaining customers; yet they are the only entities for whom the study results are relatively meaningless. They will continue to pay for ineffective drugs because of rules that stand no chance of being changed in the current political climate. The barriers that the President faces in implementing this kind of policy change are ultimately barriers of perception – the perception that medical decisions should only be handled by doctors and patients; that government has nothing to offer in this area.

Changing these perceptions will be a worthwhile challenge if the Obama administration is serious about bringing down healthcare costs.

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