Least Costly Alternative Is Not Necessarily Best Treatment

April 22, 2014, 09:00 am

MedPAC recommendations miss the mark

By Kenneth Thorpe

Share on facebook0Share on twitter0Share on google_plusone_shareMore Sharing Services0Share on email

 0

During a recent meeting of the Medicare Payment Advisory Commission (MedPAC, the panel that advises Congress on Medicare policy), proposals put forth could compromise care for millions of Medicare beneficiaries.

Of particular concern is applying "least costly alternative" or "comparative effectiveness" standards in Medicare policy, which would shove patients into "one size fits all" Medicare decisions made in Washington.  Under this scenario, if federal officials at Medicare decided that one treatment (for example, a drug, device or surgery) is close enough clinically to another treatment, Medicare payment would be set at whichever treatment was cheapest.

On paper, basing reimbursement on the cheapest available could be perceived as a great way to save money. With financial insolvency projected for the year 2026, Medicare needs to achieve cost savings in order to strengthen its own sustainability. So why not simply set reimbursement levels at the lowest possible level?

In practice it puts Medicare policy in between doctors and patients and takes away doctors' ability to tailor care to the needs of each patient. Without the ability to tailor care to meet their individual patient's needs and preferences, doctors and hospitals must either prescribe the cheapest treatment or pass along the costs of a more appropriate treatment onto the patient. These inherent problems are widely recognized by those, who understand from experience, that their needs are different from other patients with the same condition. In a recent poll conducted by the Partnership to Improve Patient Care (PIPC), respondents overwhelmingly rejected these types of proposals that would allow a government agency to determine which treatments were "best" based on "one size fits all" judgments.

Maybe this could work in a world in which all human beings were identical in their body chemistry, genetic makeup, and health status, but in reality, our population is comprised of an infinite array of genetic and molecular combinations. Consequently, one person might achieve better health from a particular medicine while his or her neighbor may see no health improvement, or even suffer side effects.  This is particularly true for the Medicare population. More than half of those 65 years or older have five or more chronic health conditions, of varying degrees of severity. In treating these patients, physicians painstakingly determine which combinations of medicines, will be most effective in controlling symptoms and enabling healthier lives. By limiting coverage to treatments deemed to be the "least costly," these patients may face barriers and additional costs when seeking the combination of treatments that works best for them.

The "least costly alternative" proposal is just one example of this issue. Patients will face the same challenge as CMS uses its current authority to pursue "bundled payment policy" that relies on rigid treatment protocols and care pathways to achieve savings. This policy operates on the same principle - assume treatments are equal on average and ignore wide variation in patient needs. In a recent Clinical Cancer Research journal article, leaders in the cancer community highlighted concerns with these types of policies, saying that these "approaches, which relied on static, point-in-time evaluations based on broad population averages, seem to be particularly challenged by the emerging science in oncology, by the growing emphasis on patient engagement and patient centeredness, and by the new era of personalized cancer care that these changes are driving." 

The MedPAC discussion raises a pivotal question - should saving money take precedence over prescribing the most effective treatments?  Should we even have to ask that question? Wouldn't it be far preferable to have a serious national discussion about ideas that could bring greater value and cost-effectiveness to Medicare without denigrating the quality of care patients receive?

We could certainly make Medicare a stronger program, in a financial and healthcare sense, if we invested in early interventions and innovative therapies to attack chronic disease, spending relative pennies to keep people healthy instead of large dollar amounts to treat symptoms that have exacerbated.  In fact, a number of care models, such as patient-centered medical homes, intensive monitoring and care coordination for patients after they leave the hospital, and chronic care self-management are making a difference in both lowering costs and improving outcomes. 

We cannot achieve a healthier society simply by making investments based on what is the cheapest. No patient wants to, or should, feel squeezed into a "one size fits all" treatment plan. MedPAC's proposed "least costly alternative" policy is the wrong policy in the wrong place at the wrong time. 

Thorpe, Ph.D., is chairman of the Partnership to Fight Chronic Disease (PFCD) and a Robert W. Woodruff professor and chair of the Department of Health Policy & Management in the Rollins School of Public Health at Emory University, Atlanta, Georgia. He also co-directs the Emory Center on Health Outcomes and Quality. He was deputy assistant secretary for Health Policy in the U.S. Department of Health and Human Services from 1993 to 1995.