Historical Perspective on Health Reform – Part 1, Medical Effectiveness

Since the time-line for health reform legislation has continued to be stretched, I recently spent some time cleaning out old files.  In my excavations I came across papers, articles, memos and briefing books which demonstrate that no matter how much things change, some aspects of health reform have stayed the same.  For example, below are a couple of snippets from memos about a proposed Medical Effectiveness Initiative from circa 1989:

Establishing a Medical Effectiveness Initiative at the OASH [Office of the Assistant Secretary of Health] level. (FY90 request = $52 million) This initiative would assess which medical treatments are cost-effective, and identify inappropriate and unnecessary medical practices. This knowledge would be used by reimbursing agencies in containing health care costs. [FYI – for budgetary comparisons, FY89 budget authority for the NIH was $7.15 billion, and $536 million for the FDA, and $141 billion for HCFA – now CMS.]

The Secretary’s Effectiveness Initiative for promoting the public health has as its goals:

  • improving the quality of health care received by Americans through the provision of effective, appropriate care, and involving the consensus of the medical community;
  • control of health care costs through elimination of ineffective and unnecessary medical treatments and comparison of the cost-effectiveness of alternative treatment modalities, thus insuring access to care;
  • enhancing the scientific basis of medicine through application of current technology (e.g. meta analysis; mainframe and software design) to the issues of medical treatment effectiveness; and
  • enhancing the competitive basis of the health care industry through provision of information to patients and providers on risks and benefits, including cost-effectiveness of medical treatments.

While the budgetary size of the proposal is very small compared to current initiatives, (e.g. the $1.1 billion for Comparative Effectiveness Research enacted earlier this year in the stimulus legislation), the wording and rationale for the proposals sound very similar – except that this initiative would explicitly use the information to alter government reimbursement  practices, which was precluded under the ARRA bill.

One difference that dates this language is the phrase “mainframe and software design.”  There have been significant advances in computer technology – which we now term IT – and these advances enable much better and rapid monitoring of quality, as well as and spending and utilization.  Such near real time quality and cost monitoring is important for implementing programs that provide cost and quality information to clinicians, patients, payers and others.  The ability to deliver analyses based on information which is days, weeks or maybe a month or two old, and reflects individual actions, is much more effective for changing behaviors and practice patterns than is data which is years old, and may be aggregated information for a population or across a region.  In addition, IT advances have made risk adjustment a much more robust process – if not exactly precise.  This is critical for the success of quality improvement and cost control programs because the first response from every clinician presented with information that the care they provide is costlier, or somehow lower in quality, than their peers’ practice patterns is that their patients are more severely ill than average and that explains why their costs are higher and outcomes poorer.

Next Up: Part 2 – Historical Perspectives on Universal Coverage and Cost Containment

One thought on “Historical Perspective on Health Reform – Part 1, Medical Effectiveness

  1. Pingback: Health Policy and Communications Blog » Blog Archive » Cost and Coverage c. 1989-91: Part 2 of Historical Perspectives on Health Reform

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