SPEAKERS CONTENTS INSERTS Tables
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45–987 CC
1998
ISSUES RELATING TO MEDICARE'S COVERAGE POLICY
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
APRIL 17, 1997
Serial 105–14
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Printed for the use of the Committee on Ways and Means
COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman
PHILIP M. CRANE, Illinois
BILL THOMAS, California
E. CLAY SHAW, Jr., Florida
NANCY L. JOHNSON, Connecticut
JIM BUNNING, Kentucky
AMO HOUGHTON, New York
WALLY HERGER, California
JIM McCRERY, Louisiana
DAVE CAMP, Michigan
JIM RAMSTAD, Minnesota
JIM NUSSLE, Iowa
SAM JOHNSON, Texas
JENNIFER DUNN, Washington
MAC COLLINS, Georgia
ROB PORTMAN, Ohio
PHILIP S. ENGLISH, Pennsylvania
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
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J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
CHARLES B. RANGEL, New York
FORTNEY PETE STARK, California
ROBERT T. MATSUI, California
BARBARA B. KENNELLY, Connecticut
WILLIAM J. COYNE, Pennsylvania
SANDER M. LEVIN, Michigan
BENJAMIN L. CARDIN, Maryland
JIM McDERMOTT, Washington
GERALD D. KLECZKA, Wisconsin
JOHN LEWIS, Georgia
RICHARD E. NEAL, Massachusetts
MICHAEL R. McNULTY, New York
WILLIAM J. JEFFERSON, Louisiana
JOHN S. TANNER, Tennessee
XAVIER BECERRA, California
KAREN L. THURMAN, Florida
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
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Subcommittee on Health
BILL THOMAS, California, Chairman
NANCY L. JOHNSON, Connecticut
JIM McCRERY, Louisiana
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
PHILIP M. CRANE, Illinois
AMO HOUGHTON, New York
SAM JOHNSON, Texas
FORTNEY PETE STARK, California
BENJAMIN L. CARDIN, Maryland
GERALD D. KLECZKA, Wisconsin
JOHN LEWIS, Georgia
XAVIER BECERRA, California
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Ways and Means are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined.
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C O N T E N T S
Advisory of April 10, 1997, announcing the hearing
WITNESSES
Health Care Financing Administration, Hon. Bruce C. Vladeck, Administrator
Agency for Health Care Policy and Research, John M. Eisenberg, M.D., Administrator
National Institutes of Health, Claude Lenfant, M.D., Director, National Heart, Lung, and Blood Institute
Blue Cross and Blue Shield Association, David Sheridan, M.D
California Healthcare Institute, David. L. Gollaher
Cooper, Joel D., M.D., Washington University School of Medicine
Health Industry Manufacturers Association, Ted R. Mannen
SUBMISSIONS FOR THE RECORD
American Lung Association and American Thoracic Society, joint statement
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Collins, Curtis J., Vancouver, WA, letter
Cooper, Joel D., M.D., Washington University School of Medicine, St. Louis, MO, rebuttal
Cute, Jim, Cape Coral, FL, letter
DeFazio, Eugene, Anthony, FL, letter
Gilman, Hon, Benjamin A., a Representative in Congress from the State of New York, statement
Jackson, Elizabeth Jean, Andover, NY, letter
Munzer, Alfred, M.D., Washington Adventist Hospital, Takoma Park, MD, letter
Ramstad, Hon. Jim, a Representative in Congress from the State of Minnesota, statement
Weaver, Ivan J., Lancaster, PA, letter
ISSUES RELATING TO MEDICARE'S COVERAGE POLICY
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THURSDAY, APRIL 17, 1997
House of Representatives,
Committee on Ways and Means,
Subcommittee on Health,
Washington, DC.
The Subcommittee met, pursuant to notice, at 1:09 p.m., in room 1100, Longworth House Office Building, Hon. Bill Thomas (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HEALTH
CONTACT: (202) 225–3943
FOR IMMEDIATE RELEASE
April 10, 1997
No. HL–10
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Thomas Announces Hearing on
Issues Relating to Medicare's Coverage Policy
Congressman Bill Thomas (R–CA), Chairman, Subcommittee on Health of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on issues relating to Medicare's coverage policy. The hearing will take place on Thursday, April 17, 1997, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 1:00 p.m.
In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.
BACKGROUND:
Under the Social Security Act, Medicare explicitly covers broad categories of benefits, but in general, does not specify coverage for individual items and services. As such, the Secretary of Health and Human Services has discretion to make coverage decisions for items and services
determined to be ''reasonable and necessary'' for the diagnosis and treatment of an illness or injury, or to improve the function of a malformed body part. Historically, the Health Care Financing Administration (HCFA) has interpreted the definition of reasonable and necessary to be ''safe and effective'' by acceptable clinical evidence. In evaluating coverage decisions, HCFA considers several factors, including the potential for widespread use in medical practice, the level of disagreement about the technology's safety and effectiveness, and the variation among contractor decisions.
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In 1989, HCFA issued a proposed regulation on Medicare coverage decisions that included in the criteria an analysis of ''cost-effectiveness.'' Last year, HCFA indicated that it would issue final regulations on the 1989 proposed regulations. However, because of concerns raised about the seven-year gap between the proposed and final regulations, and serious concern that the use of cost-effectiveness as a criteria could preclude beneficiaries from receiving life-saving services, HCFA decided that it would no longer pursue its Medicare coverage policy through the regulatory process at this time. It is clear that questions remain about HCFA's current decision-making process and the impact of this process on patient access to advanced medical technology.
In announcing the hearing, Chairman Thomas stated: ''With constant advances in medical sciences and changing practice patterns, we need to make sure Medicare beneficiaries have the most up-to-date and fair system for bringing state-of-the-art medicine to beneficiaries as quickly as possible. Beneficiaries deserve a system that encourages medical innovation while ensuring the safety of patients.''
FOCUS OF THE HEARING:
The hearing will focus on Medicare's current coverage policy, beneficiary access to new medical technologies and procedures, the appropriate relationship among Federal agencies in Medicare coverage decision-making, interactions between coverage decisions and the private sector, and the impact of coverage decisions on beneficiary selection of Medicare managed-care plans.
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DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Any person or organization wishing to submit a written statement for the printed record of the hearing should submit at least six (6) copies of their statement and a 3.5-inch diskette in WordPerfect or ASCII format, with their address and date of hearing noted, by the close of business, Thursday, May 1, 1997, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Subcommittee on Health office, room 1136 Longworth House Office Building, at least one hour before the hearing begins.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.
1. All statements and any accompanying exhibits for printing must be typed in single space on legal-size paper and may not exceed a total of 10 pages including attachments. At the same time written statements are submitted to the Committee, witnesses are now requested to submit their statements on a 3.5-inch diskette in WordPerfect or ASCII format.
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2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments by the Committee, must include on his statement or submission a list of all clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the name, full address, a telephone number where the witness or the designated representative may be reached and a topical outline or summary of the comments and recommendations in the full statement. This supplemental sheet will not be included in the printed record.
The above restrictions and limitations apply only to material being submitted for printing. Statements and exhibits or supplementary material submitted solely for distribution to the Members, the press and the public during the course of a public hearing may be submitted in other forms.
Note: All Committee advisories and news releases are available on the World Wide Web at 'http://www.house.gov/ways_means/'.
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The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202–225–1721 or 202–225–1904 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.
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Chairman THOMAS. The Subcommittee will come to order.
Today's hearing will focus on Medicare's decisionmaking process for the coverage of medical services and treatments and the effects of this process on the medical care beneficiaries receive.
The Medicare statute specifies broad categories of services to be covered by Medicare. The HCFA, Health Care Financing Administration, has broad discretion under Medicare to make coverage decisions based on services and treatments determined to be medically necessary. Since the inception of Medicare, HCFA has used this authority to define coverage for everything from simple diagnostic tests to major organ transplants.
Medicare's current coverage policy was designed to respond in a decentralized manner to the time requirements of getting up and running and addressing the needs of a fee-for-service system in the sixties. As medical technologies develop and become increasingly complex and integrated, HCFA has had difficulty responding to coverage decisions in a timely and consistent manner, often affecting patient access to new technologies and related procedures.
Back in 1989, HCFA issued a proposed regulation on its coverage policy for Medicare, in part to address these issues. Under the proposed regulation, ''cost effectiveness'' would have been included as a coverage criteria. However, because of its controversial nature, HCFA never followed through—or for whatever other reason may have been the reason—HCFA never followed through with the final regulation.
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Then just last year, 1996, HCFA dusted off the 1989 regulation and indicated to me, at least, that they were going to issue it as a final regulation. I did not support HCFA's decision to issue it as a final regulation because of what I consider to be a significant gap in time between the proposed and then the final regulations, a time gap that may not have been as critical in different periods but absolutely critical in the late eighties and early to midnineties.
Because I believed and continue to believe that this is an issue of critical importance to Medicare beneficiaries, we need a full public airing of the issue. We do need to move forward toward a new coverage policy which allows for flexibility and creates a clear standard that is consistent and timely. We should establish this new coverage policy with full public comment, since there are no clear guidelines at this time.
Seniors should have timely access to the constantly evolving, innovative improvements in medical technology. Hopefully, today's hearing will examine who should make the decisions about what is medically necessary, what standards should be used, and what is the best process for how conflicts should be resolved in a world of limited resources and unlimited demand.
I am reminded of my friend from Louisiana's admonition that people will consume as much health care as other people are willing to pay for, and in certain contexts, this certainly occurs.
At this time, I would like to submit for the record a written statement by our colleague from Minnesota, Mr. Ramstad, who could not be with us today. Mr. Ramstad has examined this issue closely and has provided valuable insight on issues related to beneficiary access to medical technology. Without objection, his written statement will be made a part of the record.
[The prepared statement follows:]
Statement of Jim Ramstad, a Representative in Congress from the State of Minnesota
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Mr. Chairman, thank you for calling this important hearing today to discuss Medicare's coverage policy.
I am looking forward to the testimony of Dr. Joel Cooper, chairman of thoracic surgery at the Washington University School of Medicine.
Dr. Cooper will be speaking on an issue that a few of my colleagues and I are deeply concerned about, an issue that we asked the Subcommittee to address—and we appreciate your including this topic in your hearing today.
I am referring to the Health Care Financing Administration's (HCFA) decision last year not to extend Medicare coverage for lung volume reduction surgery (LVRS).
Since this decision was made, HCFA and the National Institutes of Health (NIH) have called for a national multicenter randomized controlled trial study comparing LVRS with current medical treatments. The proposed 7-year study would include approximately 2,580 Medicare patients. While some patients in the study would receive LVRS, some would receive other treatments and procedures. Additionally, Medicare would not pay for LVRS for any patients treated outside of the study, despite the fact some private insurers do cover the procedures.
Because many in the medical community believe LVRS is a safe and effective treatment for certain patients with end-stage emphysema, my colleagues and I are concerned that the decision not to extend Medicare coverage for the procedure could negatively affect the lives of thousands of older Americans who suffer from this disease.
The proposed 7-year study of LVRS also places a cap on the number of medical centers eligible to particpate in the study and limits Medicare reimbursement to only a small number of patients at those centers to receive LVRS. Clearly, patient access to the LVRS procedure is severely restricted.
It is reasonable to gather and analyze data on patients who have received LVRS in order to determine the long-term efficacy and mortality associated with the procedure. It also seems reasonable for HCFA to limit reimbursement for the procedure to those patients who meet appropriate selection criteria and to medical centers that meet strict participation criteria. However, the decision to limit Medicare reimbursement to only those patients participating in the randomized study has created significant controversy with patients and within the medical community.
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Because this situation raises important ethical and quality of care concerns, I would like to thank you again, Mr. Chairman, for calling this hearing. I look forward to the testimony of today's witnesses and learning more about Medicare's coverage policy for all items and services.
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Chairman THOMAS. The gentleman from California.
Mr. STARK. Mr. Chairman, as I indicated to you, I was unsure about the direction of today's hearings, but I gather from your opening statement a flavor that I think makes me understand it better. I had a question for Mr. Vladeck, but it would serve as an opening statement and, I think, fits in with what you are talking about.
It suggests that the public trusts institutions less and less. They do not trust government much. They trust HMOs less and their doctors less. As budget pressures grow, there are going to be more rationing questions. We are hearing about them every day. Why was this denied? Why was that denied? I gather we will get into some of that today.
You mentioned that we may wind up missing OTA or some other independent group that can make some of these technical or professional decisions for us. Should we be thinking about either adding this teaching responsibility to several of the boards that now advise us, whether it is PhysPRC, ProPAC, Congressional Research Service, GAO, or should we be thinking again about setting up a new medical scientific commission? We are going to, sooner or later, have some outcomes research. It will probably take 4 or 5 years to get enough of a data base for us to use it much, but then, how will that get used? We do not have the expertise or the resources to make that decision, and maybe that is something the witnesses can help us with as we go along today. How ought we get this empirical advice that would help us?
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So I look forward to the witnesses and the Chair's comments this morning.
Chairman THOMAS. I thank the gentleman. Sometimes we are not limited by the advice we get. It is the attempt to evaluate it that is the difficult part.
Our first witnesses today, and it is nice to have the Administrator of the Health Care Financing Administration, Bruce Vladeck, with us again. With him is Dr. John Eisenberg, who is the Administrator of the Agency for Health Care Policy and Research, reasonably alive and well after the last congressional session, and Dr. Claude Lenfant, who is the Director of the National Heart, Lung, and Blood Institute, National Institutes of Health.
If you have any written statements, they will be made a part of the record and you may proceed to inform us for as much time as you believe is necessary, Mr. Vladeck, I would say, and the others are probably on a little tighter leash.
STATEMENT OF HON. BRUCE C. VLADECK, ADMINISTRATOR, HEALTH CARE FINANCING ADMINISTRATION
Mr. VLADECK. Thank you very much, Mr. Chairman. It is always a pleasure to be here, Mr. Stark and Mr. Houghton.
Today, it is a particular pleasure to be accompanied by my distinguished colleagues, Dr. Eisenberg and Dr. Lenfant, who speak to some of the issues before us today with their own very formidable experience and expertise, and I am really delighted to share this panel with them.
Over the last 30 years, we have developed a coverage process to assure access to medical advances for Medicare beneficiaries while protecting them from services of unproven effectiveness. Our goal is to continue to maintain and to improve a dynamic decisionmaking process, to produce consistent coverage guidance in the face of rapid changes in medical technology and health care delivery.
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I am proud of the way in which our policymaking system is meeting that challenge. In recent years, we have undertaken a number of changes in the way in which we do things and we have approved a range of new technologies and interventions, such as ventricular assist devices, to provide a bridge for a transplant for beneficiaries in Medicare-certified heart transplant centers. More recently, we worked out with the FDA a process through which we can cover the majority of medical devices subject to investigational device exemptions, and we have begun to pay for portable ventricular assist devices to allow patients to leave the hospital while they await a transplant.
As I think you suggested, Mr. Chairman, every insurer and health care purchaser in the current environment has to deal with health policy and coverage policy. Private as well as public insurers, like Medicare, want to purchase high quality health care for the best price in an era of rapid changes in medical technology and extraordinary investments on the part of manufacturers.
In the case of Medicare, we have the particular requirements in the Social Security Act which provides that a technology or service must ''be reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member.'' All of the Medicare coverage policy over the last 30 years has come from that basic statutory definition.
Interpreting this provision in the light of authoritative evidence gives us the ability to keep our benefits current. To assure we are living up to the standards in the statute as well as getting the best health care values for our beneficiaries, we apply to the assessment of new interventions or new technologies three criteria: a demonstrated effectiveness, appropriateness, and comparison with similar technologies.
By demonstrated effectiveness, we mean the extent to which authoritative evidence in the professional and medical community has established the benefits and appropriateness of a new technology. To make determinations as to demonstrated effectiveness, we rely heavily on technology assessment from agencies such as the Agency for Health Care Policy and Research, consensus conferences of the National Institutes of Health, the Veterans Administration, and the private sector medical community, particularly the specialty societies, as well. We, of course, have an extensive data base of our own which can inform this decisionmaking process and contribute to the work of these expert bodies.
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In addition to determining whether or not a new procedure or technique is effective, we also have to be concerned with appropriateness, that is, the extent to which a service is suitable for but not in excess of the beneficiary's medical needs and conditions and is being provided by providers with the capabilities and skills to appropriately derive the benefit from the service.
Finally, we do compare new procedures or techniques with existing technologies. This does not mean we will decide whether or not to cover something on the basis of a cost-effectiveness analysis. We do not and will not make coverage decisions on the basis of cost effectiveness, and we will not refuse to cover services merely because they are costly. On the other hand, if a new service or technique is no more effective and less cost effective than the current technology in place, we believe we should pay no more for it than we do for the existing technology.
We make national coverage decisions after a thorough assessment of all the available data according to the criteria I have just described. In doing so, we frequently consult the Technology Advisory Committee, consisting of the medical directors from 10 of our carriers and representatives from the NIH and AHCPR, the Veterans Administration, the FDA, and CHAMPUS. Our national coverage decisions are binding on Medicare contractors.
When there is no national decision for a particular service, our contractors frequently issue local medical review policies describing the circumstances under which an item or a service will be covered. In doing so, they are required to seek formal comment on such policies from the medical communities in their States and to give 30 days' notice before implementation.
We have a number of steps underway, outlined in my written statement, to improve coordination among the individual carriers and local medical policies and to use that increasingly as a basis to moving more quickly and efficiently to national coverage decisions.
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All of us face the dilemma of often having to make decisions in the face of inadequate data. Many services come to be widely diffused without ever having been examined through controlled studies. We have a responsibility, we believe, as the Nation's largest payer, not only to make the right decisions consonant with the statute but also to help produce the data and the evaluations on medical effectiveness in order to improve the information base of our decisionmaking and that of others.
When reimbursement is provided before there is adequate clinical evidence to demonstrate the effectiveness of a new technology, that technology can diffuse rapidly, often inappropriately, in a way that significantly reduces our ability to ever adequately evaluate it. To address these kinds of concerns, we have begun to employ the device of what we are calling ''coverage with conditions.'' We will use coverage with conditions only when existing data suggests a potential benefit to some patients but there is not enough data to predict the effect of generalized use of the technology or its long-term effects or appropriate patient selection criteria.
The conditions under which we will cover such procedures or services may include limitations on the use of the service or technology or may just require providers to collect data or to provide it under certain protocols.
Probably the most notable example of such coverage with conditions is our recent agreement with the National Heart, Lung, and Blood Institute regarding lung volume reduction surgery, a term that encompasses a set of procedures intended to improve lung function and relieve the debilitating symptoms for patients with chronic obstructive pulmonary disease. Despite very limited evidence of its efficacy, this surgery diffused very rapidly from 1993 to 1995.
In its 1997 appropriations conference report, Congress required us, with the advice and technical assistance of the Agency for Health Care Policy and Research, to report on the treatment of end-stage emphysema and COPD and on unilateral and bilateral lung volume reduction surgery. We were asked to review all available studies and make a recommendation as to the appropriateness and conditions of Medicare coverage for such procedures. We have provided a preliminary study of a preliminary version of this report as an appendix to my testimony and we present there the results of our review of 21 recently published articles on lung volume reduction study and on our findings from Medicare data bases.
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Based on this review, we believe, number one, that the earlier AHCPR assessment, that the objective data do not permit a scientific conclusion about the risks and benefits of LVRS, is still valid; number two, that the implication that AHCPR, and we drew from that study that this procedure should be covered only in the context of a controlled study, remains valid; and number three, that many of the weaknesses found in the data in the earlier formal technology assessment by AHCPR still exist. These weaknesses include study design problems, very brief followup periods, inconsistent measurement of important patient outcomes, and the failure to follow many patients after surgery.
This year, under our agreement with the National Heart, Lung, and Blood Institute, 18 clinical centers and 21 hospitals will begin to provide the service to Medicare patients and receive Medicare reimbursement. The study will include patients undergoing LVRS via two separate procedures, along with maximum medical therapy, and contrast them with patients receiving only maximum medical therapy. This study will allow us to identify and distinguish between the impacts of the surgery on patients' mortality, morbidity, quality of life, and on its impact on the disease itself.
I have tried to keep my prepared statement very brief. There is a much longer written statement, as you know. Obviously, we are happy to answer any questions, and I am sure my colleagues will add considerable insight to those very brief remarks.
Thank you again for the opportunity to be here, Mr. Chairman.
[The prepared statement and attachment follow:]
Statement of Hon. Bruce C. Vladeck, Administrator, Health Care Financing Administration
Introduction
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Thank you for the opportunity to come here today and talk with you about how we make Medicare coverage policy. Over the past 30 years, we have developed a coverage process that assures access to medical advances for Medicare beneficiaries, while protecting them from services whose effectiveness is unproven. This is one of HCFA's greatest challenges in administering the Medicare program—to maintain a dynamic decision-making process that produces consistent coverage guidance in the face of rapid changes in medical technology and health care delivery.
I am proud of the ways in which our coverage policy-making system is meeting that challenge. For example, in recent years, we have approved ventricular assist devices to provide a bridge to a transplant for our beneficiaries in Medicare certified heart transplant centers. More recently, under our new program covering devices that are subject to an investigational device exemption (IDE), we have begun to pay for a portable version of this device that will allow patients to leave the hospital while they await their transplant.
In today's health care market, every insurer and health care purchaser must deal with coverage policy. Private as well as public insurers, like Medicare, want to purchase high quality health care for the best price. Health plans, whether public or private, managed care or traditional indemnity plans must control costs while still continuing to assure the highest quality of care for their subscribers. This cannot be done without authoritative evidence of the value of each individual service.
Medicare has emerged as a leader in the move toward such evidence-based decision making for coverage policy. We rely on state-of-the-art technology assessment and on agencies such as: The Agency for Health Care Policy and Research (AHCPR), The Food and Drug Administration (FDA), the National Institutes of Health (NIH), the Department of Veterans Affairs (DVA), the Department of Defense (DOD) as well as the advice of the medical community and private sector studies. Our own extensive reimbursement data contain additional useful information for assessing the effectiveness of all varieties of medical care. The experience from our program can benefit the entire health care marketplace.
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Furthermore, the sheer numbers of beneficiaries that we serve and the wealth of information that we possess about them makes Medicare an important force in the market. We recognize that our coverage process also controls services provided by managed care plans that serve Medicare beneficiaries. Not only is the share of Medicare patients in managed care plans growing rapidly, but plans must provide these enrollees with the same Part A and Part B benefits that Medicare fee-for-service beneficiaries enjoy. As a result, managed care plans have an increasing interest in our process being as scientific and thorough as possible.
Medicare coverage decisions probably also influence private plans' coverage decisions for their non-Medicare patients. However, many private plans now have sophisticated technology assessment and coverage processes of their own.
Many Medicare coverage decisions are made by our local carriers, based on the statutory requirement to cover only services that are reasonable and necessary for the diagnosis and treatment of illness or injury. In making their decisions, carriers depend upon the knowledge and advice of local physicians and other local specialists and on local medical review policies that are shared among carriers. HCFA has an overall interest in increasing the consistency of coverage policy among carriers and making national policy for coverage issues that are significant.
The Coverage Policy Process
Over the past 30 years, Medicare's coverage process has evolved from a relatively informal set of procedures for deciding on payment of particular claims, to a sophisticated process that includes extensive medical advice and state-of-the-art technology assessments.
The key to understanding Medicare coverage policy is its statutory foundation. The Social Security Act lists 55 categories of benefits that are covered under the program. They include physician services, inpatient hospital services, services in ambulatory surgical centers, and many more. The Act also gives the Secretary of the Department of Health and Human Services broad discretionary authority to go beyond these defined benefits to make coverage decisions on individual items and services. The law says:
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''Notwithstanding any other provisions of this title, no payment may be made for items or services which ... are not reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member.''
The interpretation of this provision, using authoritative evidence of whether a service is ''reasonable and necessary,'' gives us the ability to keep Medicare benefits current in the face of changing medical practice.
The criteria used to make these decisions have evolved over time in response to our experience and to public comments and suggestions. The criteria that now guide the coverage process are: demonstrated effectiveness, appropriateness, and comparability to similar services. I will discuss each of these in turn.
Demonstrated Effectiveness
Demonstrated effectiveness is the first criterion for determining that a service or health care technology meets the Medicare coverage requirements. There must be authoritative evidence to establish that the benefits of a service or technology to the patient outweigh its reasonably anticipated risks. There must also be authoritative evidence to convince HCFA or its contractors that use of the service or technology will result in improved health outcomes (such as decreased morbidity or mortality or significantly increased quality of life, for beneficiaries or some groups of beneficiaries). In addition, items or services that are regulated by FDA must have received approval for marketing.
To find evidence that we consider authoritative in demonstrating the effectiveness of a service on patient outcomes, we examine:
• published articles based on controlled clinical trials, other controlled studies, and case series;
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• formal technology assessments from recognized government and private entities, which examine both published and unpublished data;
• evaluations or studies initiated by Medicare contractors; and
• authoritative approvals of other agencies, such as FDA, that a service has therapeutic or diagnostic benefit for patients.
Sometimes these assessments are made by HCFA staff and our advisors. But with increasing frequency we are obtaining formal technology assessments from the AHCPR and other government and private organizations.
Assessments of health care technology have at least two features that are important to HCFA. First, rather than evaluating services in an investigational setting, they are focused on the effectiveness of technologies in general medical practice and on patient outcomes including morbidity, mortality, health status and health-related quality of life. Second, they use systematic methods for evaluating the quality of the scientific evidence available rather than relying on the less formal examination of medical opinion or consensus. They also grade the quality of the evidence based on the study methods. We have adopted these evidence-based methods as our primary means for making Medicare coverage decisions.
The evidence-based environment increases the importance of giving the public access to HCFA while we are in the process of making coverage decisions. We have expanded the opportunities for interested parties to provide information and expert advice both before and after decisions are made. To ensure that our process for determining coverage is evidence-based, we consult extensively with interest groups and receive expert medical advice from both government and private clinicians. Our Internet Home Page is another means by which we hope to increase participation by interested parties. In addition, we are continually improving our communication methods with our contractors, who are often the first to become aware of the use of new health care technologies.
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Appropriateness
Appropriateness means, to HCFA, that a service is suitable for, but not in excess of, the beneficiary's medical needs and condition. The qualifications of those providing the service and the setting where the service is provided may be a part of this criterion. The service must be furnished by personnel who are qualified by training, experience and licensure to provide that service and, in some instances, who meet HCFA-established training levels. The service must be furnished in a setting that is suitable for, but not in excess of, the beneficiary's medical needs and condition and must meet any facility requirements established by HCFA. For example, cardiac catheterization may be covered for some patients in a freestanding facility, but for patients with a high risk of complications, a hospital may be the only appropriate setting for receiving this service.
Comparison with Similar Technologies
It is apparent that cost-effectiveness analysis is extremely controversial for beneficiaries, providers and suppliers. It raises fears of rationing based on cost. HCFA has not and does not intend to make coverage decisions based solely on cost-effectiveness, and we will not refuse to cover services merely because they are costly. Moreover, manufacturers or providers do not need to submit formal cost-effectiveness analyses to HCFA in order to have a service considered for coverage.
Nevertheless, in order to become prudent purchasers of health care, third party payers, including HCFA, must consider the full value of any medical service they are considering for coverage. Cost-effectiveness analyses, when available, can be used in this regard. These analyses allow us to consider the full range of present and future costs and benefits of a service. Without it, payers and providers often focus on the present costs of expensive technologies rather than on the full value of the service.
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Under specific and limited conditions, relative costs and effectiveness will be factors considered in determining Medicare payment policy. That is, if a service is more expensive but equally effective, it would still be covered and paid at the rate of the lower cost alternative. If, however, the service is found to be more effective for a specific group of patients, it could be paid at the higher rate. This criterion assures value for the Medicare program and its beneficiaries.
Local and National Coverage Decisions
The Medicare coverage process is sometimes confusing to the public because of the coexistence of national coverage decisions with those made locally by Medicare contractors. National coverage decisions are issued by HCFA after a thorough assessment of the statutory and clinical issues and analysis of the data. These decisions are binding on Medicare contractors. In the absence of national decisions for particular services, contractors have the discretion to issue local medical review policies.
Most Medicare coverage decisions are made locally, by HCFA contractors, according to the criteria that I just described and any applicable national coverage policy. Medicare contractors can issue local medical review policies to describe the circumstances under which an item or service will be covered. In developing such policies, our contractors are required to seek formal comment from the medical community who provide the item or service. Following the comment process, our contractors must publish final policies 30 days prior to implementation.
In addition, there are Carrier Medical Director (CMD) workgroups, national and regional meetings between the CMDs and HCFA, collaboration between carriers and the Peer Review Organization (PRO), and Carrier Advisory Committees (CACs), which represent medical physician specialties, beneficiaries and HMOs. All of these activities aid in the process of developing, revising, and gauging the impacts of the development of local policy. All local medical review policies generated by a contractor are published; frequently the contractors conduct seminars, generate special bulletins, or use other methods to ensure that the medical community is aware of new policies. Though well planned and highly examined, such local policies have at times led to geographic variation in Medicare coverage that concerns our beneficiaries and providers.
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HCFA cannot guarantee the consistency of Medicare coverage by directing local policy. However, local policies are shared among carriers and guide other carriers' local medical review policies. To increase the consistency of coverage, HCFA began a system of Carrier Medical Director workgroups to examine coverage issues. These groups pool resources and develop model policies, which operate to guide local policies. The model policy process is one way to increase consistency in coverage across the country for services that are not the subject of national policies. HCFA has also begun to issue a greater number of national coverage decisions to increase uniformity and to make our coverage policy more timely and flexible in response to available medical evidence. Issues are reviewed for national coverage for a number of reasons including high potential for the service to diffuse rapidly on a national basis; considerable local variation in coverage; or the availability of substantial amounts of medical evidence.
When we, at HCFA, decide to review a service for national coverage, we may perform an internal review of policy or consult with our technology advisory committee (TAC) consisting of ten carrier medical directors, including a managed care medical director, and representatives of NIH, AHCPR, VA, FDA and CHAMPUS. The TAC provides interchange between local and national policy and considers when an issue becomes of such prominence that it warrants a national policy. HCFA develops the agenda that the TAC will follow to evaluate and make its recommendations.
The TAC could recommend that HCFA: issue a national coverage policy, refer the issue for assessment by the Public Health Service or other qualified assessment organization, postpone the decision until there is more information, or decline to establish a new policy. HCFA can then accept or reject the TAC's recommendation.
Although TAC proceedings are closed to the public, the meeting agendas and minutes are now made available through HCFA's Home Page on the Internet. This is one of the means by which we hope to increase participation by interested parties.
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Recent Innovations
All health plans, including Medicare, face the dilemma of having inadequate data to make evidence-based coverage decisions for some new technologies and services. Many services have not been adequately examined through controlled studies. Medicare payments for indirect medical education (IME) help contribute to the funding of health care research. As the nation's largest payer, Medicare recognizes its responsibility both to assist in producing data on the effectiveness of medical care and to provide access to valuable new technologies for Medicare beneficiaries as quickly as possible.
This responsibility is particularly vexing since the timing of technology assessments in relation to reimbursement for a service can be problematic. If assessments are done too early, the results from the investigation may not be generalizable to standard medical practice. Depending on such assessments would produce poor coverage decisions. But if reimbursement is delayed, due to lack of evidence, practitioners might cease using the technology before adequate data can be gathered.
The reverse situation is more common and creates even more of a dilemma. General reimbursement has often been provided before adequate clinical evidence exists. In such cases, a technology can diffuse rapidly, significantly reducing our ability to design the type of controlled study needed to provide good medical evidence.
To address these critical issues in coverage policy-making, Medicare has undertaken one of its most important efforts to date—''coverage with conditions.'' I will describe some of the recent steps we have taken.
Coverage with Conditions
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Our recent decision to pay for certain lung volume reduction surgery procedures in conjunction with a clinical trial is an example of ''coverage with conditions.'' This type of coverage may be used when existing data suggest a potential benefit to some patients, but there is not sufficient information to predict the effect of generalized use of the technology or its long term effects or appropriate patient selection criteria.
Coverage with conditions may include limitations of use, data collection, or the provision of the service under protocol conditions. These efforts may be implemented by making payments only to providers involved in a study sponsored by the National Institutes of Health or other research organizations. The objective of coverage with conditions is to advance medical knowledge about the effectiveness of the services before they are diffused to general practice and to assure that Medicare beneficiaries are not put at undue risk from their use.
Only services that meet all of the following criteria will be considered for this coverage:
• the service is of substantial interest for Medicare coverage because it would potentially affect a large number of beneficiaries or provide an important new benefit to some;
• enough information exists about the service for HCFA to judge the service reasonable and necessary under particular conditions;
• the service is unproven with regard to questions remaining about risks and benefits that must be answered for a final coverage decision;
• the information necessary for HCFA to make a national coverage decision is unlikely to be developed by researchers unless coverage with conditions is offered; and
• any regulated services used with the service in question are approved for marketing by the Food and Drug Administration (FDA).
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It is Medicare's long standing policy that, in general, services covered in clinical trials cannot be reimbursed because there is insufficient evidence of their benefits and risks. The above criteria differentiate coverage with conditions from clinical trials.
Lung Volume Reduction Surgery
An example of coverage with conditions is Medicare's recent agreement with the National Heart, Lung, and Blood Institute (NHLBI) regarding Lung Volume Reduction Surgery (LVRS). LVRS encompasses procedures intended to improve lung function and relieve the debilitating symptoms for emphysema patients. Despite the very limited evidence of its efficacy, this surgery diffused rapidly from 1993–1996.
In September 1995, a workshop on LVRS, sponsored by the National Heart, Lung, and Blood Institute (NHLBI) called for controlled studies of this surgery. A few months later, HCFA issued a policy of noncoverage for all LVRS based on the lack of medical evidence and the potential for morbidity and mortality among Medicare beneficiaries from LVRS. At the same time, we requested that the Agency for Health Care Policy and Research (AHCPR) perform an assessment of LVRS procedures.
AHCPR's assessment report in April 1996, said that the objective data did not permit a scientific conclusion about the risks and benefits of LVRS. AHCPR further recommended that the procedure only be covered within the context of a controlled clinical study. Later that month, HCFA and NHLBI agreed that NHLBI would design and fund such a study, now known as the National Emphysema Treatment Trial (NETT), and HCFA would pay for the medical care provided to Medicare beneficiaries participating in the study.
In its FY1997 Appropriations Conference Report, Congress required HCFA, with the advice and technical assistance of AHCPR, to report to Congress on the treatment of end-stage emphysema and chronic obstructive pulmonary disease and on unilateral and bilateral lung volume reduction surgery (LVRS). HCFA was asked to review all available studies and, based on this review, make a recommendation as to the appropriateness and conditions of Medicare coverage of such a procedures.
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In the preliminary summary that accompanies this testimony, we present the results of our review of 22 recently published articles on LVRS and our findings from the Medicare databases. Based on this review, we believe that the conclusions of the AHCPR assessment are still valid, and their implications for Medicare policy the same. That is, LVRS should be covered only in the context of a controlled study. As described in the attached summary of our forthcoming report to Congress regarding LVRS, many of the weaknesses found in the data by AHCPR still exist. These weaknesses include study design problems, very brief follow-up periods and inconsistent measurement of important patient outcomes. Moreover, results may be biased as a result of many patients that were not followed after surgery.
Our analysis of Medicare claims data raised further concerns. We examined 711 Medicare claims for LVRS between October 1995 and January 1996. Of these patients, 26 percent had died by January 1997. Forty percent of the patients were hospitalized during the approximately 12 months following surgery. These patients averaged 2.1 acute care hospitalizations for a total of 20 hospital days. Sixteen percent of the patients had either a long term care hospital admission (averaging 30 days) or a rehabilitation hospital admission (averaging 24 days) The controlled study will allow us to identify and distinguish between LVRS' impact on these patients' mortality and morbidities requiring hospital stays and the impact of the disease itself.
This year, 18 clinical centers including 21 hospitals will begin to provide this service to Medicare patients and receive Medicare reimbursement. The study will include patients undergoing LVRS via median sternotomy or via video assisted thoracoscopy along with maximal medical therapy and patients receiving only maximal medical therapy in the non-surgical arm of the study. The study is scheduled to be completed in five years. The final study protocol is now being determined by the Executive Steering Committee for the study and will be completed by the end of May 1997.
Medicare payment for LVRS will be made only for patients who are participating in NHLBI's controlled clinical study of this new procedure. However, we are committed to modifying this policy quickly whenever new and scientifically conclusive data regarding the surgery confirm that it meets our criteria for coverage. For example, if the study's Data Safety Monitoring Board were to recommend and NHLBI to agree that some group of patients were achieving a clear benefit from LVRS, we would extend coverage to them at once. Likewise, a finding of clear ineffectiveness or harm for some patients would result in a noncoverage policy for that group.
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Coverage of Category B Investigational Devices
Another type of coverage with conditions involves certain devices and drugs subject to FDA approval. It has long been our policy that items cannot be covered under Medicare until they receive approval for marketing from FDA. In September 1995, an agreement between Medicare and FDA regarding medical devices subject to investigational device exemptions (IDEs) led to a significant coverage policy change.
FDA agreed to classify devices with IDEs into two categories:
• Category A IDEs are experimental investigational devices, meaning that significant risk is being investigated.
• Category B IDEs are non-experimental investigational devices, meaning that incremental risk is being investigated, and that the fundamental issues of safety and effectiveness have already been resolved.
Those IDEs that were labeled ''Category B,'' based on their substantial equivalence to existing devices, were made eligible for Medicare coverage while they are being studied for incremental risk. A condition of this coverage is that the service is being provided under the FDA protocol.
The President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry
We expect the recently created President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry to provide a forum for better understanding of the changes in the health care financing and delivery system and to provide valuable information to further inform our evidence-based coverage decision making. This high level commission, chaired by the Secretaries of Health and Human Services and Labor, includes representatives from the health care professions, other health care workers, institutional providers, insurers, purchasers, state government, consumers and experts in health care quality, financing and administration. Their recommendations for addressing the effects of the changes in health care financing and delivery will help public and private policy makers define appropriate consumer protection and quality standards.
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Conclusion
The coverage process of the Medicare program has evolved over the years to meet the rapidly changing demands placed on it by the ever-increasing advances in medical science and technology. Like all health care insurers, it is our ongoing responsibility to define, clarify, review, and modernize the benefits under the Medicare program.
HCFA has been a leader in the trend in our health care industry toward evidence-based decisions and policies that provide needed scientific data to support medical effectiveness and outcomes. In today's environment, Medicare will continue to make coverage decisions and modify them whenever necessary to reflect new findings and data. It is vital that providers, suppliers, manufacturers and beneficiaries understand and participate in this process.
For more than 30 years, the Medicare coverage process has assured access to medical advances for beneficiaries while protecting them from unproven services, an accomplishment that continues to benefit the entire health care system. We plan to build on this success and to ensure that beneficiaries have access to those state-of-the-art technologies that preserve and support maximum well-being and quality of life.
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Medicare Coverage of Lung Volume Reduction Surgery (LVRS)
Preliminary Report to Congress
In its FY1997 Appropriations Conference Report, Congress required HCFA, with the advice and technical assistance of AHCPR, to report to Congress on the treatment of end-stage emphysema and chronic obstructive pulmonary disease and on unilateral and bilateral lung volume reduction surgery (LVRS) and supplemental surgical methods. HCFA was asked to review all available studies and, based on this review, make a recommendation as to the appropriateness and conditions of Medicare coverage for such procedures. This preliminary report responds to that requirement. Additional information on the protocol will be forwarded at a later date.
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Summary
Lung Volume Reduction Surgery encompasses procedures intended to improve lung function for emphysema patients and relieve debilitating symptoms of the disease. LVRS diffused rapidly from 1993–1996, despite a paucity of medical evidence concerning its safety and efficacy. Moreover, there are considerable debates within the medical community not only about the appropriateness of surgical intervention, but also concerning the relative merits of a variety of surgical approaches, appropriate selection of patients, and the contribution of comprehensive pulmonary rehabilitation.
In December 1995, HCFA issued a noncoverage policy for all LVRS procedures based on the lack of medical evidence and potential for extensive morbidity and mortality among Medicare beneficiaries. HCFA also requested that the Center for Health Care Technology (CHCT) of the Agency for Health Care Policy and Research (AHCPR) undertake a complete review of available evidence, published or unpublished. Over the same period of time, the National Heart, Lung and Blood Institute (NHLBI) also became interested in the medical issues concerning LVRS. A September 1995 workshop sponsored by NHLBI called for controlled studies. In April, 1996, the CHCT report was released. Based on an analysis of approximately 2800 patients from 27 institutions, the report concluded that the available data did not permit a scientific conclusion regarding the risks and benefits of LVRS. The report recommended that since some patients appeared to benefit in the short run, Medicare coverage might be provided within a controlled clinical study. Later that month, HCFA and NHLBI signed an agreement to participate in such a study. As part of this agreement, NHLBI would design and fund the study and HCFA would provide reimbursement for the medical care services provided to Medicare's beneficiaries in the study.
The clinical study, for which protocol has not been finalized, may include as many as 9000 patients. The study represents a precedent setting cooperative effort between the nation's largest payer and its premier science agency for research on pulmonary diseases and may serve as a model for future assessments of important new technologies. Medicare beneficiaries will be provided controlled access to a promising but in many ways unproven procedure, while scientifically valid data to guide future use and reimbursement decisions are generated.
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As is true for many new technologies in the U.S. health care system, many parties are interested its rapid diffusion. Emphysema affects millions of individuals with substantial disability, morbidity and mortality. LVRS offers hope of improved quality of life for some of these patients. Because of the potentially large number of patients that might be eligible for this surgery, there is also a considerable financial interest in LVRS on the part of providers and manufacturers. Therefore, it is understandable that there would be questions about the cautious approach to LVRS represented by the clinical study. This report will provide comprehensive answers to such questions. It provides detailed explanations of the study, an assessment of recent data concerning LVRS and details of how modifications to Medicare coverage policy will be made.
What Do Recent Published Data Suggest About the Appropriate Course of Action for Medicare?
We reviewed 21 recently published articles regarding LVRS for this report. A set of evidence-based criteria for systematic review was applied, including examination of study design, outcomes measured and patient follow-up. In addition, we examined Medicare databases in order to provide supplemental information on patients' morbidity and mortality following surgery.
The conclusion from this review is essentially the same as that of the AHCPR/CHCT assessment and an assessment for the American Lung Association. While some patients appear to benefit for a short period of time in terms of selected measures of lung function and exercise capacity, the most critical questions concerning the risks and benefits of LVRS for particular patients cannot be adequately answered by existing data. Indeed, the data review heightened the importance of producing scientifically valid evidence concerning the durability of any benefits and mortality during a reasonable post-surgical period. Thus, the most appropriate course for Medicare on behalf of its beneficiaries remains the cautious and scientific path reflected in the NHLBI/HCFA clinical study. That is, the data suggest enough potential for benefit that some Medicare coverage should be provided, but only under the conditions present in a clinical study that will generate the medical evidence needed to answer critical questions about the value of this surgery.
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These conclusions result from several inherent weaknesses in the published data concerning LVRS. First, the published articles present case series data rather than evidence from clinical studies. While the authors involved should be commended for reporting outcomes data, case series are generally considered as a weak and potentially misleading form of evidence concerning the effect of therapeutic interventions. Moreover, while an important test for the value of LVRS will be its risks and benefits over a reasonable time period—e.g. 1–2 years—most available studies report patient experience at 3 months. In addition, the majority of studies measure what are considered surrogates for the patient outcomes of interest. Thus, the impact of LVRS on quality of life, use of medical care services and mortality is yet to be determined.
In addition to the problem of these data being available for a relatively short time after surgery, an important issue regarding these studies is that a substantial number of patients are lost to follow-up. This problem is particularly true for data beyond the 3 months post-surgery and may result in considerable bias for reported outcomes. The most comprehensive study examined outcomes at 6 and 12 months. Two-thirds of the patients could be followed for 6 months and one-half for 12 months. Of those that could have been followed at 12 months, 26% were missing. The study reported favorable changes in some outcome measures at 12 months. To the extent that such numbers of missing patients differ systematically from those that can be followed , any reported change in outcomes may be due to such selection bias rather than any effect of the surgery.
Finally, analysis of Medicare claims raises related concerns. Beginning in October 1995, a specific ICD–9 code was assigned to LVRS. We identified 711 claims for LVRS that used this code between October 1995 and January 1996. Of these patients, 26% (185) had died by January 1997. Moreover, 40% are hospitalized post-surgery, averaging 2.1 admissions and 30 hospital days in the 12 months following the surgery. Sixteen percent of the patients had either a long term care hospital admission (averaging 30 days) or a rehabilitation hospital admission (averaging 24 days). The fact that LVRS patients are a high risk for both morbidities requiring hospital stays and mortality during the post-surgical period requires careful examination. In particular, the controlled study will allow us to distinguish between LVRS's impact on these measures, and the impact of the disease itself.
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The NHLBI/HCFA Clinical Study
The study is a multi-center clinical trial designed to determine the efficacy of two surgical approaches to bilateral lung volume reduction, median sternotomy and video assisted thoracoscopy. Efficacy will be determined with regard to a variety of patient outcomes including lung function measures, exercise tolerance, medical care service use, a variety of quality of life measures and mortality. Eighteen study centers, including 21 hospitals has been chosen for the study. The study is scheduled to be completed in 5 years.
Patients will be randomized to either of two surgical groups with maximal medical therapy, or a group that will receive only maximal medical therapy. Maximal medical therapy includes state of the art medical care and intensive pulmonary rehabilitation. The randomized design is chosen for two reasons. First, current data do not allow for a conclusion regarding the relative risks and benefits of LVRS or the contribution to outcomes of maximal medical therapy. Therefore, there should be no pre-disposal as to the preferred course of treatment. Second, because there is no existing data on the natural history for this group of patients, many of the most critical questions about the risks and benefits of LVRS can only be answered within a randomized design.
The final study protocol is being determined by the Executive Steering Committee comprising the principal investigators and investigators from the study's coordination center is expected to be completed by the end of May. Patient enrollment will likely begin this summer. The study also includes a Data Safety monitoring Board (DSMB) which regularly reviews the study data. If at any time the DSMB finds that data conclusive—that is, one of the study treatments is providing clear benefit or harm—they will recommend either the study be terminated or the protocol be modified.
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Future Medicare Coverage Decision and the Clinical Study
Soon Medicare reimbursement for LVRS is provided only within the context of the clinical study. However, HCFA is committed to modifying this policy rapidly in response to new and scientifically conclusive data regarding LVRS. The explicit contingencies for modification of Medicare coverage are part of the agreement between HCFA and NHLBI.
First, current coverage is conditioned on the study protocol and changes automatically in response to study design and analysis of evidence. The initial protocol required approximately 1300 patients each in surgery and maximal medical therapy. These patients are expected to be enrolled within 18 to 24 months of the implementation of the study. Unless the data demonstrate harmful effects, Medicare coverage will be continued in a manner consistent with the evidence. More importantly, Medicare will respond immediately to any finding of conclusive evidence by the DSMB and NHLBI. For example, if the DSMB were to recommend and NHLBI agree that some group of patient were achieving a clear benefit from LVRS, coverage would be expanded. Depending on the evidence, such expansions might take place in the study centers, or new criteria established for its provision in hospitals outside of the study. Likewise, a finding of clear ineffectiveness or harm for some patients would trigger a noncoverage policy targeted to that group.
Conclusion
We believe that the scientific, yet flexible approach to coverage of LVRS outlined in this report remains the appropriate policy course for Medicare. HCFA strives to assure access to safe and effective services for Medicare beneficiaries, while not providing reimbursement for ineffective and harmful services. Despite a number of published articles regarding LVRS, a scientific conclusion concerning the relative risks and benefits of these procedures cannot be made from existing data. By providing coverage within the clinical study, Medicare is making a precedent setting effort to provide controlled assess to a promising, yet unproven procedure while assuring that the needed medical evidence is created.
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Chairman THOMAS. Thank you, Mr. Vladeck.
Dr. Eisenberg.
STATEMENT OF JOHN M. EISENBERG, M.D., ADMINISTRATOR, AGENCY FOR HEALTH CARE POLICY AND RESEARCH
Dr. EISENBERG. Thank you, Mr. Chairman. Good afternoon, Mr. Chairman, and Members of the Subcommittee. It is a pleasure to join you today in my first full week as the new Administrator of the Agency for Health Care Policy and Research, AHCPR. I enjoyed my work for you as Chairman of the Physician Payment Review Commission, and I look forward to continuing to work with you in the years to come.
I know that this Subcommittee knows well that there are gaps in our knowledge about medical effectiveness and that these gaps lead to wide variations in coverage and wide variations in the use of health care services. For example, the rate of prostate biopsy in Dallas is 30 per 1,000 Medicare beneficiaries, whereas in McAllen, Texas, the rate is 8 per 1,000, less than one-third the rate in Dallas. Which is better? We need to know.
Mr. Chairman, I want to make two points at the outset about technology assessment. The first one is that when we refer to technology, we are not only referring to expensive or high-tech services like lung volume reduction surgery. We are also referring to the vast array of what is called little-ticket technologies, like pap smears, lab tests. The use of these technologies can add up to big expenses, but in the long run, some of them can also save money.
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For example, an AHCPR-funded research project indicated that the use of low-tech strategies to prevent pressure ulcers could, in just two States, New Hampshire and Vermont, save Medicare more than $1 million annually.
A second point is that as the variation in prostate biopsies suggests, there is a need for more scientific information that is related to the appropriate use of technology and that that does not end just with the decision about coverage. Even when coverage is not an issue, clinicians and patients need the latest scientific information to determine whether a procedure is appropriate, for which patients, and when in the course of their disease.
The evaluation of lung volume reduction surgery is a good example of how we can respond to this need for evidence about what works in medical care. Unless we address the need for this type of scientific evidence on the benefits and on the costs of medical technology, I am concerned that we run the risk that future efforts to contain health care spending will not be informed about the effectiveness of these new services and could, in fact, inhibit innovation.
Let me comment briefly on the role of the Agency for Health Care Policy and Research in providing the scientific information that is used in making informed decisions, not only about coverage but also about the best way to use covered services.
First, this agency conducts and supports research on the effectiveness and the cost effectiveness of services, like prostate disease.
Second, we conduct and we support research on involving patients in these treatment choices. For example, an AHCPR research project developed something called a ''shared decisionmaking program'' which includes a video disk for use by patients who have prostatic enlargement. It helps them to make informed choices among the options that are available to them, and pilot studies have shown that these patients, in fact, choose surgery less often.
Third, we conduct and we support research on medical information technologies, like CHESS, which is the Comprehensive Health Enhancement Support System. This is a system developed by researchers at the University of Wisconsin that enables patients to make decisions about the services that they need and to understand their diseases better. This has resulted in these patients having lower health care costs and fewer and shorter hospitalizations.
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Fourth, we conduct and we support research to improve the methodology to assess technology. For example, AHCPR supports the development of outcomes and effectiveness measures, like an index for a visual function impairment in patients who have cataracts.
And fifth, this summer, we will fund about 10 evidence-based practice centers around the country that will provide public and private organizations with scientific information that will help them to improve the quality, effectiveness, and the appropriateness of clinical practice.
Mr. Chairman, from my personal research before entering government last week and from AHCPR's experience in technology assessment, I think we face a number of important challenges. Let me mention three.
First, both the public and private sectors need to devote more resources to technology assessment, which, in the long run, can enhance the quality of medical care and give us more value for our limited dollars.
Second, the results of this technology assessment must be in the public domain so that all potential users of this technology or this service can be informed, especially patients and those small health plans who do not have the resources or the ability to do the research themselves.
And third, we need collaboration, collaboration between plans, the scientific community, and the developers of these innovative technologies to collect data on patient outcomes and costs and to use the best scientific methods available, particularly randomized control trials.
Mr. Chairman, I believe that increased collaboration between the public and the private sectors is critical to ensure that we increase innovation while at the same time maintain high quality and value in our health care system. I think we can build the evidence and the science base to provide both the public and the private sectors with timely and accurate science-based information to help patients and clinicians make informed coverage and utilization decisions.
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Thank you.
[The prepared statement follows:]
Statement of John M. Eisenberg, M.D., MBA, Administrator, Agency for Health Care Policy and Research
Introduction
Good Afternoon Mr. Chairman and members of the Subcommittee. It is a pleasure to appear before the Subcommittee in my first full week as the new Administrator of the Agency for Health Care Policy and Research (AHCPR). I enjoyed my work for you as Chair of the Physician Payment Review Commission, and I look forward to working with you in the years to come. I especially want to thank you for giving me the opportunity today to address the issue of evaluation science and how it relates to coverage decisions in our health care system.
Market forces have spawned unprecedented changes in our health care system. The health care market today is characterized by intense price competition, with purchasers demanding greater accountability and value. These pressures are leading health plans and facilities to give increasing scrutiny to capital investments and decisions to cover new medical procedures or services. In an atmosphere of constrained resources, it is hardly surprising that we are facing increasing demands to prove that we are getting real value for the health care dollars we spend. Unfortunately, decision makers often lack the scientific evidence on effectiveness that would help them judge the relative value of alternative health technologies.
One result of our shortage of scientific evidence is our health care system's wide variation in use of services. Often, this occurs when there is ambiguity on the effectiveness of the procedure or service. There is also variation in what services are covered. For example, a recent study on laser therapy demonstrated that there is substantial variation in coverage on new technologies. A 1994 General Accounting Office Report found substantial variability among Medicare carriers with respect to denial rates for services screened for medical necessity (GAO Report, 1994).
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Variation also exists in medical practice among states and local jurisdictions. For example, the rate of prostate biopsy in Dallas, Texas is 29.6 per thousand of Medicare enrollees, compared to McAllen, Texas where it is 8.3 per thousand of Medicare enrollees (Wennberg, 1996). Health services research has shown that these differences can be attributed in large part to a lack of knowledge regarding the efficacy and effectiveness of medical technologies. (Steiner, 1996 & 1997). A study examining the high variability in the use of electroconvulsive therapy found that a primary cause was the lack of knowledge regarding the effectiveness of the procedure (Hermann RC, 1995).
Another consequence of inadequate evidence on effectiveness is that old technologies linger even when they have been surpassed by better ones. In 1989, I published a study that examined old and new technologies in hospitals and found that new technologies did not replace older technologies, but were simply added to the hospital regimen. For example, we found only a small reduction in one older technology, oral cholecystogram, after the introduction of a new and clearly better technology, gallbladder ultrasound (Eisenberg, 1989).
The lack of scientific evidence on the effectiveness of medical procedures and technologies is troublesome: it complicates the treatment decisions physicians and patients face, makes it difficult for plans to make appropriate coverage decisions, and can lead to appeals of coverage decisions in court.
Technology and the Cost of Medical Care
Mr. Chairman, let me make two points at the outset. First, when I refer to technology, I am not only referring to expensive high-technology devices such as magnetic resonance imaging, but also to the vast array of ''little ticket'' technologies, such as pap smears and other common medical procedures and services. These small-cost technologies can add up to big expenses. For example, an AHCPR funded recommendation for preventing pressure ulcers led to the finding that use of low-tech treatments for pressure ulcers could, in just two states, New Hampshire and Vermont, result in Medicare savings of over $1 million annually.
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Second, as my earlier prostate example suggests, the need for scientific information related to the appropriate use of technology does not end with a medical coverage decision. Even when medical coverage is not an issue, clinicians and patients need the latest scientific information to determine whether the procedure or service is appropriate in each specific instance. They need to balance carefully the risks and benefits of every medical intervention and any alternatives for each individual patient's circumstances.
This is critically important because there is a growing body of scientific research that demonstrates that patients often receive services that are not clinically indicated. For example, researchers at the RAND Corporation found that up to 30% of patients whose medical records they reviewed received medical procedures that were not appropriate when measured against rigorous clinical standards established by experts. They also concluded that the appropriateness of another 10% of procedures was equivocal (RAND Studies). Other researchers have estimated that only 20% of technologies now used in the practice of medicine have been specifically evaluated (OTA Report, 1994).
When medical technology is used appropriately, it can improve health, and in some instances, reduce costs. For example, in 1991, AHCPR conducted a technology assessment on laparoscopic cholecystectomy on behalf of Health Care Financing Administration (HCFA). Based on AHCPR's recommendations, HCFA covered this procedure, which has subsequently resulted in reduced hospital length of stays. This finding is borne out in a recent study funded by AHCPR, in which patients with laparoscopic cholecystectomies had hospital stays that were one-third less than those who underwent the standard surgical procedure.
Another example is AHCPR's assessment of routine laboratory tests in end stage renal disease (ESRD) for patients undergoing dialysis. In 1994, there were 200,000 individuals receiving dialysis at a cost of $7 billion annually. An AHCPR health technology review found that there was little scientific data to support the routine use of some of the tests performed in patients undergoing dialysis. Clearly, millions of dollars can be attributed to the cost of testing—some of which is unnecessary.
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At the same time, technology can increase costs. Excessive and inappropriate use of new drugs, devices, and other services is driven by many causes—economic incentives for physicians and hospitals, the practice of defensive medicine, and insurance systems that pay for technological interventions more generously. Poor understanding concerning the effectiveness and outcomes of medical technology is also a contributing factor.
Another problem is the use of ineffective technology, which can raise costs but not improve patient outcomes. Also, the rapid rate of development and diffusion of new and promising technologies often means that timely data are not available to make a scientific judgment regarding their effectiveness. A recent study found that a majority of medical directors of health plans cited the lack of timely data on the safety, effectiveness, and cost-effectiveness as the major barrier to establishing optimal coverage decisions. As a result, we need to develop innovative approaches to acquire the necessary data (Steiner, 1996).
AHCPR's technology assessment on lung volume reduction surgery (LVRS) is a case in point. This technology assessment concluded that there was insufficient evidence on which to make a scientific judgment regarding the effectiveness of LVRS. AHCPR recommended that coverage be granted within the scope of a clinical trial, which is now being conducted by the National Institutes of Health. AHCPR is supporting the cost-effectiveness component of that trial. It is significant that this study will also include measures of patient preferences and of quality of life, because the role of these factors are an important component of the scientific knowledge we hope to derive. It is our hope that the collaborative efforts between the NIH and AHCPR will yield the information needed to make an informed coverage decision on LVRS.
Another mechanism that should be explored as a complement to clinical trials to evaluate technologies is the ''Centers of Excellence'' approach that was used in coverage of cardiac transplants. These Centers are defined by having a demonstrated expertise in performing a given procedure or technology. Additionally, patients are registered and outcomes and effectiveness data are collected throughout the episode of care to help further refine the technology or procedure being performed.
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Working Together
Approaches involving cooperation between an insurer (in this case, Medicare), the scientific community, and advocates of new technology will become increasingly essential in the years ahead. Unless we address the need for solid, scientific evidence on the benefits and costs of medical technology, we run the risk that future efforts to contain health care spending will inhibit innovation. This could mean that better technology—even more cost-effective technology—will not be developed, and American leadership of a global industry could be lost.
The role of the government is pivotal in this regard. It is the largest purchaser and provider of health care services, accounting for at least 45% of all health care spending. For some procedures federal dollars account for the lion's share of expenditures. For example, Medicare and Medicaid expenses for coronary artery bypass graft procedures exceed $8.7 billion and represent 56% of the total expenditures for this procedure (AHCPR, 1992). As a purchaser of medical care, the federal government has a compelling interest in technology assessment and those decisions need to be based on the best scientific information available.
Through the work of the National Institutes of Health and AHCPR, the federal government also helps to build the underlying research, the basic science for technological innovation and its assessment. In addition to conducting technology assessments for HCFA and the Department of Defense, AHCPR supports work that is critical to the field of technology assessment, such as:
• the effectiveness and cost-effectiveness of alternative treatments and services provided in community settings (including stroke and cardiovascular disease, prostate disease, diabetes, and pneumonia and other common conditions);
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• research on the functional outcomes of treatments for patients and the importance of involving patients in treatment choice. For example, an AHCPR research project developed a ''Shared Decision Making Program,'' which included an interactive videodisc for use in helping patients with benign prostatic hyperplasia make informed choices among treatment options. Pilot studies have shown that patients who view the vidoeodisc choose surgery less often than other patients;
• the development of medical information technologies such as computerized patient records, computerized decision support systems, hospital and ambulatory care data systems that provide the ability to conduct this research while providing additional resources to clinicians. For example, an AHCPR-supported study found that AIDS patients who use the Comprehensive Health Enhancement Support System (CHESS) had fewer visits to doctors office, or spent 17% less time in doctors' offices. These patients have lower health care costs and fewer and shorter hospitalizations. AIDS patients using CHESS had 20% lower treatment costs overall; and
• research to improve the methodology underlying technology assessment. For example, AHCPR supports the development of outcomes and effectiveness measures such as the ''VF–14,'' an index of functional impairment in patients with cataracts.
Our research demonstrates that technology assessments, done scientifically(see footnote 1) can provide the infrastructure to help reduce practice variation and to allow for informed decision making. This summer we will implement our new Evidence-Based Practice Center program through which we will provide public and private sector organizations with scientific information to improve the quality, effectiveness, and appropriateness of clinical practice. The Centers' evidence reports will provide critical evaluations of the available scientific literature regarding clinical interventions and technologies. The topics for the evidence reports will be selected from nominations by the private and public sectors. With the support of the Appropriations Committees, we have set aside funds for this effort and will fund about 10 evidence based practice centers this summer. The Centers will better enable AHCPR to serve as a ''science partner'' for both the public and private sector. These reports will also assist HCFA, DoD, VA, states, and private sector purchasers to make informed decisions on the effectiveness or appropriateness of specific health care technologies.
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Next Steps
Mr. Chairman, from my work in the area of technology assessment and the experience of AHCPR in technology assessment, I conclude that we face a number of important challenges in this area:
• Both the public and private sector need to devote more resources to technology assessment. Choices are being made everyday in the health care system. These choices run the risk of being determined solely by cost considerations, unless we assure that the scientific evidence is available to make informed decisions. Failure to address this will put medical innovation at risk. It is interesting to note that, as a proportion of national health care expenditures, total funding for technology assessment in other nations is 18 to 160 times higher than in the U.S. For example, technology assessment expenditures in France are 22 times higher, (Holohan, Lancet 1996) despite the fact that its population is 2 times greater than the Medicare population alone.
• The results of technology assessments need to be in the public domain so that all potential users of the technology or service can be informed. The important methodological details of publicly funded research are by definition available to all those interested in how results were reached. Interested parties may include patients/consumers, providers, plans, and providers. The same access may not be granted for research done for proprietary reasons. Additionally, small firms such as biotechnology start-ups, may not have the resources to conduct effective outcomes studies alongside their basic science and clinical investigations.
• We need creative collaborations between plans, the scientific community, and developers of innovative technology to collect data on patient outcomes and costs. Without better approaches to securing these data in timely manner, we will never be able to assure that medical coverage decisions are based on science rather than economics. We can't ignore patients in this mix. One of their concerns is that cost may limit their access to the latest medical technology. The President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry, on which I serve as deputy chair, is likely to address this issue as it develops a patient's bill of rights.
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• We have a responsibility to provide the latest scientific information on technologies to clinicians and patients as well as to those making coverage decisions. This information is critical to the appropriate use of technology in day-to-day practice. There already is a lot of health related information in the public domain through the Internet and popular media. Unfortunately, much of it is conflicting and anecdotal. Patients need unbiased science-based information to help them make better health care decisions in consultation with their doctors.
Mr. Chairman, I believe that increased collaboration between the public and private sector is critical to ensure that we increase innovation, while at the same time maintain high quality and value in our health care system. By doing this, we can build the evidence and science base to provide the public and private sector with timely, accurate, science-based information to make informed coverage decisions.
References
Eisenberg et al, Clinical Economic. A Guide to Economic Analysis of Clinical Practices, Journal American Medical Association, 1989
GAO Report, Medicare: Inconsistent Denial Rates for Medical Necessity Across Six Carriers, 1994
Herman, RC, Variation in ECT Use in the U.S., American Journal of Psychiatry, 1995
Holohan, TV, Lancet, The Federal Role in Health Technology Assessment, 1996
OTA Report, Identifying Health Technologies That Work, 1994
RAND Corporation Studies: Chassin, MR et al , Does Inappropriate Use Explain Geographic Variation in the Use of Health Care Services? A Study of Three Procedures, Journal of the American Medical Association, 1987
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RAND Corporation Studies: Matchar, DB et al, Carotid Endarterectomy: A Literature Review and Ratings of Appropriateness and Necessity, RAND Report, 1992
RAND Corporation Studies: Bernstein,'S et al, Hysterectomy: A Literature Review of Ratings of Appropriateness, RAND Report, 1992
RAND Corporation Studies: Brook, RH et al, Appropriateness of Acute Medical Care for the Elderly: An Analysis of the Literature, RAND Report, 1991
Steiner C et al, Awareness of Providers' Use of New Medical Technology Among Private Health Care Plans in the U.S., International Journal of Technology Assessment in Health Care, 1996
Steiner C et al, Coverage Decisions for Medical Technology by Managed Care: Relationship to Organizational and Physician Payment Characteristics, American Journal of Managed Care, 1996
Steiner C et al, Technology Coverage Decisions by Health Care Plans and Considerations by Medical Directors, Medical Care, 1997
Wennberg JE, The Dartmouth Atlas of Health Care, 1996
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Chairman THOMAS. Thank you very much, Doctor.
Dr. Lenfant.
STATEMENT OF CLAUDE LENFANT, M.D., DIRECTOR, NATIONAL HEART, LUNG, AND BLOOD INSTITUTE, DEPARTMENT OF HEALTH AND HUMAN SERVICES, NATIONAL INSTITUTES OF HEALTH
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Dr. LENFANT. Thank you very much, Mr. Chairman.
I am pleased to have the opportunity needed to address the Subcommittee and to share our views on lung volume reduction surgery, or LVRS. This, as you well know, is a much debated issue among the medical community.
The Institute became involved in early 1995 when members of that community approached us with their concerns about the increasing use of this procedure despite the fact that its effectiveness had not been demonstrated. This led to a consensus workshop that recommended a randomized study to rigorously assess, first, the effectiveness of the procedure, and then which patients would benefit from it.
Through its own process, HCFA reached a similar conclusion. It approached us, and we agreed to join forces to conduct the study which is now ongoing.
With this background, I would like to make four points about clinical trials in general and this one in particular. First, we believe the LVRS trial to be not only appropriate, but necessary, to give both patients and their physicians the information they need to make informed, intelligent decisions about treatment of end-stage emphysema. History, Mr. Chairman, is full of promising treatments, medical and surgical, that when evaluated under controlled conditions, failed to live up to expectations of benefits and, in some cases, caused harm.
Second, we consider a randomized clinical trial the only way to answer the question of whether LVRS helps or harms patients. Simply comparing patients before and after treatment ignores the possibility that factors other than the operation may have come into play.
Third, as with all clinical trials considered by the National Institutes of Health, the data will be continuously scrutinized by an independent scientific board called a Data Safety and Monitoring Board, or DSMB. I should underscore that the board will be independent from the investigators and independent from the agency.
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As part of its review of the protocol before the trial begins, the DSMB will examine all available data on LVRS to ensure that the protocol is valid in terms of what is known today. If the board concludes that an identifiable subset of patients clearly benefits from LVRS, the DSMB can and will recommend that the criteria for entry into the trial be modified accordingly.
The DSMB can also recommend changes in the protocol, even after it is underway, if data show that a certain group of patients is highly likely to benefit from the surgery. The DSMB has the power to recommend early termination of the trial if the data show a clear benefit or risk from the intervention. In this regard, you may have seen a couple of days ago an announcement in the Washington Post on the termination of a clinical trial regarding a procedure for heart disease, which was more effective than the other procedures.
Fourth and last, Mr. Chairman, I would like to underscore that a trial is the fastest, most efficient, and most accurate way to provide the information we need. Without it, billions of health care dollars may be spent, tens of thousands of patients may be exposed to the risk of an unproven treatment, and the value of LVRS will forever remain in doubt.
So to conclude, Mr. Chairman, in our views, this is not an issue of rationing or limiting access to a procedure. This is to establish that patients are not exposed to an unnecessary risk.
Thank you very much. I will be pleased to answer your questions.
[The prepared statement follows:]
Statement of Claude Lenfant, M.D., Director, National Heart, Lung, and Blood Institute, Department of Health and Human Services, National Institutes of Health
I am pleased to have this opportunity to address some questions that have arisen regarding lung volume reduction surgery (LVRS) and the Lung Volume Reduction Clinical Trial supported by the National Heart, Lung, and Blood Institute (NHLBI) and the Health Care Financing Administration (HCFA). Today, I would like to tell you exactly why the NHLBI got involved with the LVRS issue; why a randomized trial is the only valid way to determine the benefits and risks of LVRS to patients; why such information is critical to patient decision-making; and why the approach adopted by the NHLBI is the fastest, most efficient, and most accurate way to provide that information.
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Why is the NHLBI Involved?
In early 1995, members of the medical community discussed with the NHLBI widespread concerns that hundreds of patients were receiving LVRS despite the fact that its effectiveness had never been established. The only results we had were preliminary, nothing was known about the long-term outcome, and no scientific evidence was available to indicate which patients might benefit from the operation.
In response to these concerns, the NHLBI convened a workshop in September 1995 to elicit the views of experts in pulmonary medicine, thoracic surgery, physiology, outcomes assessment, quality-of-life evaluations, and statistics on LVRS. They concluded that although LVRS was a promising procedure, it ''must be evaluated in a scientific, coordinated, and cooperative fashion.'' They recommended that the NHLBI ''develop a mechanism for funding data collection and analysis from a multicenter study'' and that ''a randomized study with a controlled nonsurgical arm ideally should be undertaken to evaluate the procedure critically.'' Thus, by the time HCFA approached us, the NHLBI was already firmly convinced that a critical evaluation of LVRS was scientifically indicated and essential.
The preponderance of professional opinion supported the NHLBI in this view. Moreover, the American Thoracic Society, the medical section of the American Lung Association, adopted a position paper on LVRS in May 1996, stating ''the conduct of clinical trials, preferably in a controlled, randomized fashion, is urgently needed.''
Why a Randomized Trial?
A randomized clinical trial is the only way to answer the question of whether LVRS helps or harms patients. In the absence of such a trial, we have no idea whether this operation represents an improvement over current treatments and whether it has unacceptable risks. To date, LVRS has been performed on a very select group of patients (only 10 to 30 percent of patients referred for the procedure are considered suitable for the surgery), and we do not know how they would have fared without surgery. Simply comparing patients before and after treatment ignores the possibility that factors other than the operation may have come into play. Only a randomly selected control group allows evaluation of the true effect of the treatment.
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Our experience has demonstrated the importance of a control group time and time again. It was impressively illustrated in the NHLBI Cardiac Arrhythmia Suppression Trial (CAST). That study was designed to assess the effects of antiarrhythmic drugs, since heart arrhythmias are associated with a several-fold increase in death rate after heart attack. Although the drugs did, indeed, suppress the arrhythmias, they were also associated with higher death rates compared to placebo. Results were so dramatic that the trial was terminated early. The surprising increase in mortality would not have been apparent if the investigators had not included a control group that had received a placebo.
Experts on clinical trials overwhelmingly agree that control groups are the best way to avoid incomplete or misleading conclusions. A control group allows for reliable detection of subtle or subjective, but nevertheless important, treatment effects such as quality of life. If the effect of the treatment is large, then a control group allows us to detect it even faster and with more certainty. Thus, constructing a rigorous trial design with a control group ultimately serves patients better.
It has been argued that having a nonsurgical control group is unethical because it denies some patients access to LVRS. However, one must bear in mind that LVRS is a treatment of unproven efficacy. On the other hand, the medical therapy that is included in the trial design is the best established therapy currently available for severe emphysema, and all patients in the trial will receive it.
Why Do Patients Need This Information?
History is full of promising treatments, medical and surgical, that when evaluated under controlled conditions failed to live up to expectations of benefit and, in some cases, caused harm. Can we ever forget thalidomide? And in the area of surgery, consider the recent example of extracranial-intracranial bypass. Based on comparison of clinical outcomes among nonrandomized cohorts of patients, this operation was believed to prevent strokes; however, to the surprise of many, a large multicenter randomized trial revealed that it did not prevent stroke, but only exposed patients to the discomfort and risks of major surgery.
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We consider the LVRS trial to be not only appropriate, but necessary to give both patients and their physicians the information they need to make informed, intelligent decisions about treatment of end stage emphysema. How can physicians competently and ethically advise their patients about LVRS when they have no sound scientific basis for doing so?
Although determining efficacy and setting guidelines for which patients are likely to benefit from LVRS will not guarantee a good outcome for all patients, it will increase the chances of success for most patients and, at the very least, allow patients to make decisions based on widely accepted scientific data, which do not now exist. Patients have the right to know objectively whether the chances of success outweigh the risks.
Why the NHLBI Approach?
The NHLBI approach is flexible; it encourages continuing input from the best scientific minds in the community and relies on the investigators themselves to develop the full protocol and the manual of procedures that will guide every detail.
As with all NIH clinical trials, the data from the program will be scrutinized at least quarterly by an independent scientific board called a Data Safety and Monitoring Board (DSMB) whose responsibility it is to review the protocol for its scientific validity, oversee the performance of the centers and investigators, assess the quality of the data, and evaluate the intervention's risks and benefits to the participants. As part of its review of the protocol before the trial begins, the DSMB will examine all available data on LVRS to ensure that the protocol is valid in terms of what is known. If the board concludes that an identifiable subset of patients clearly benefits from LVRS, the DSMB can recommend that the criteria for entry into the trial be modified accordingly. The DSMB can also recommend changes in the protocol, even after it is under way, if data show that a certain group of patients is highly likely to benefit from the surgery. The DSMB has the power to recommend early termination of the trial if the data show a clear benefit or risk from the intervention, as was the case in CAST. We require this periodic review by an independent, scientific peer group in all of our clinical trials to ensure their safety, fairness, and scientific validity.
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Because of the unusual demand to have this procedure evaluated quickly, I have charged the investigators to have a protocol ready by June 1997, just one year after the release of the request for proposals. This is a rapid timetable, indeed, but I have every reason to believe it will be met.
Conclusion
End-stage emphysema is a devastating chronic illness, and its victims are desperate. LVRS is a palliative treatment that has emerged without adequate scientific validation of its efficacy. This trial represents our best opportunity to provide it. If we fail to conduct the trial, we will be failing in our mission to serve the American people. Billions of health care dollars may be spent, tens of thousands of patients may be exposed to the risks of an unproven treatment, and the value of LVRS will forever remain in doubt.
I will be pleased to answer any questions the Committee may have.
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Chairman THOMAS. Thank you, Doctor.
Bruce, when I am looking back at the 1989 proposed regulations, trying to put myself back in that timeframe, where those proposed regulations stated, ''if a service were to be viewed as marginal with respect to safety and effectiveness but expensive in comparison with available covered alternatives, we think the cost-effectiveness considerations are appropriate.''
I think almost anyone with very little effort can come up with a dramatic example which clearly indicates the value of a procedure. I think the doctor did it in his testimony in terms of the control group with the placebo. It is dramatic.
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The one that I use for example a lot of time was the one that was publicized, oh, maybe more than 1 year ago now, maybe 2 years, the open heart surgery versus angioplasty, where one is obviously more invasive but the end result is the same, and so why in the world would you go through the greater risk to the patient to get the same result.
We have those kinds of examples. They are very dramatic and they do a great job in a 20-minute speech. But when you start dealing with the entire list of services and procedures, you begin to get into a situation where the marginality of the tradeoff does not—it is a clear area in which people could debate forever.
What I am trying to do is get back into that 1989 mind, if you would help me, because we are currently facing a discussion with the Congressional Budget Office on the cost effectiveness of a number of preventive procedures, and they persist in indicating to us that there is a cost associated with these, and we are trying to explain to them, No, it saves money.
Well, the difference between their position and our position is time and that something that may be more expensive or require a payment at the front end over time is, in fact, cost effective, if you look at the total dollars that would have been spent. What was the mindset in the late eighties, the early nineties, or even now in terms of a timeframe reference vis-a-vis what you would call cost effective? I understand it between two procedures like open heart surgery and an angioplasty, but there are so many others that you do not get that clear and dramatic difference. What is the time factor in cost effectiveness, if any?
Mr. VLADECK. Mr. Chairman, let me separate my answer into three parts, if I could. The first is to say that I will not pretend to speak for the folks who wrote the proposed regulation in 1989, but I think they were trying to address a particular problem which we do encounter all the time as new technologies appear in health care. That is the question of what to do with the availability of a new technology or a new procedure, a new device, frequently, that is very, very much more expensive than the one it replaces and where the incremental benefit associated with the new device is very small.
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Chairman THOMAS. Well, I have a question with that, as well, in terms of the cost versus effective benefit.
Mr. VLADECK. I think the issue there is, frankly, that we have come to the position that even if it is no more effective than the preexisting technology, it should be made available in terms of Medicare coverage, but it is not at all clear that we should pay the incremental costs unless there is an incremental benefit, and that is the way we are now thinking about these issues.
Second, the issue of——
Chairman THOMAS. On that point, though, just let me say that is a dilemma that would have been, in my opinion, a far greater one in 1989 in the old virtual cost-plus world. Today, with the fixed-price system, and this is a question I want to give to Dr. Eisenberg, I do not think we have fully seen a blossoming of technology in a fixed-price world because, to me, technology is a tool and it is directed where it is most appropriately believed to be used, and in a cost-plus world, it was a more expensive, marginal benefit on the physical or mental aspect.
But in a fixed-price world, you are going to see technology turned in a different way and that is what concerned me so much about taking a 1989 mindset and assuming cost effectiveness in today's world. So I have another question along that line, but keep going. You have two more points.
Mr. VLADECK. Thank you. And I quite agree that the issue of cost effectiveness is different in a world of fixed prices, capitation, or fee schedules than it was in earlier times.
And second, I would say, relative to the scoring of preventive benefits, for example, in the Medicare Program, if you look at the economic literature on cost-effectiveness analysis or cost-benefit analysis, which I used to teach, one of the things that is central to such analyses is the discount rate, the issue of time. If you invest $1 now and get $1.50 back 50 years from now, that is not a good investment.
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But that is one of the reasons why we have moved away from a more classic or traditional notion of cost benefit into thinking about the Medicare Program and Medicare coverage, because the benefits are incommensurate if they have to do with increased function, with better health or greater longevity for beneficiaries. Then they are just incommensurate with any dollar outcome and you cannot compare 6 years of added life expectancy per 1,000 people with any number of dollars. It is just not an appropriate thing to do. So we do not try to look at coverage issues in that kind of old-fashioned cost-benefit terms at all.
Chairman THOMAS. No, but I do think you could take a look at someone who did not receive the ability to detect and did not receive the appropriate education to manage a disease like diabetes and take a look at what we are paying out on end-stage renal disease that would not have been paid out.
Mr. VLADECK. Again, I think those arguments are very complicated and very tricky, but frankly, I do not think those are the grounds on which we or the Congress, to be honest, should make Medicare policy. If we know a way that can improve the health of Medicare beneficiaries and that has demonstrated effectiveness, and where it is very clear, such as earlier intervention with borderline diabetics, we should provide coverage. For example, if it is going to reduce the long-term morbidity for diabetics, we ought to do it and we should not get caught up in some of the very arcane theoretical cost-effectiveness arguments at all.
Chairman THOMAS. And how do we determine if that is the case?
Mr. VLADECK. Again, I think we have a set of mechanisms through the process of technology assessment, through authoritative organizations like some of the specialty societies, like the National Institutes of Health and so forth. We have a fair amount of consensus on some issues of well-established practice in the medical community.
Chairman THOMAS. Do you believe the Government and those agencies you just mentioned have as good of cost-effectiveness analysis tools as those people who are in the business of providing the services under managed care structures?
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Mr. VLADECK. Mr. Chairman, I am trying to distinguish two issues. One is effectiveness and the second is cost effectiveness, and I am saying I think the Government experts on effectiveness from a clinical point of view are, in many ways, in fact, the gold standards on effectiveness. People all over the world look at NIH consensus statements or other formulations of opinion as a standard of practice.
Cost effectiveness is a different issue, and that is why, as I say, we do not think it is appropriate, except when comparing two technologies that produce the same outcomes, for Medicare to look at cost effectiveness as the basis for a coverage decision.
Chairman THOMAS. You indicate that Medicare is the Nation's largest payer, and you