Baucus Wants To Keep Comparative Effectiveness Separate From Cost Control

One of the first skirmishes in the 2009 health care reform debate is likely to occur over comparative effectiveness.

The Nov. 4 election was quickly followed by promises from many quarters, including Senate HELP Committee Chairman Ted Kennedy, D-Mass., to start working quickly on the big issues of comprehensive health care reform or a major extension of the child health program SCHIP. But concrete legislative action might actually start with a smaller target: comparative effectiveness research.

Senate Finance Committee staff have been promising to craft legislation when the new Congress convenes based on Chairman Max Baucus' proposal (S. 3408 in the current session) to establish a comparative effectiveness research institute.

Shawn Bishop, a committee professional staff member, told a meeting of the Personalized Medicine Coalition in late October that "we plan to come up with another revised version of this bill" and "have it ready to introduce as soon as we get back."

The Montana Democrat is committed to taking on comparative effectiveness in 2009 whether or not the bigger health care projects make progress, Bishop reported.

Baucus Asserting Moderate Leadership

"We are not waiting for a big, fat comprehensive reform bill," Bishop said. Comparative effectivness can be part of comprehensive reform or a Medicare payment bill, but it will "be there" somewhere, Bishop predicted.

Baucus' commitment on the issue is important because it will help define the climate for health care initiatives in the new Congress. The initial bill was co-sponsored by Senate Budget Committee Chair Kent Conrad, D-N.D.

Baucus wants to take charge of the comparative effectiveness issue, in part to prevent its development into a cost control project.

He is also trying to get out ahead on the larger health issues. Baucus is holding his own briefing - "Call to Action" - on major issues on Nov. 12 complete with a white paper on policy options for comprehensive reform in 2009. That would get his approach out in front before the Congressional Budget Office issues its outline of options, which it is scheduled to provide to legislators in early December.

He has carved out a more moderate position towards the issue than many members of the now larger Democratic legislative majority. Capitol Hill observers say one early indicator of how Congress is approaching health reform will be the debate over whether comparative effectiveness research should be part of the Medicare coverage process.

Baucus has taken a moderate stance on major health care legislation previously: he was the top Democrat participating in the development of the current Part D drug plan. He does not view comparative effectiveness as primarily a cost control tool. His effectiveness in preventing a link to Medicare payment policy will indicate whether he can set the tone for moderate health reform solutions.

A "Purely Informational" Research Center

Baucus proposes to set up a congressionally-chartered non-profit institute to conduct and contract out research on clinical treatments. The institute would have a relatively soft objective: providing information for other entities to build into treatment and practice guidelines. The institute would not be permitted to issue its own treatment guidelines. The research from the institute's work would also not be tied to specific government payment or coverage policy decisions.

That philosophy is aligned with many industry stakeholder perspectives. A pharmaceutical, biotech and device coalition is advancing the agenda that, while payers may use comparative research results, any government-sponsored research institute should not make direct coverage recommendations. Nor should research results be used to deny access to needed products (¹ (Also see "PhRMA, BIO Alliance Promotes Industry Agenda On Comparative Effectiveness" - Pink Sheet, 25 Aug, 2008.), p. 6).

The Health Care Comparative Effectiveness Research Institute in the first version of the Baucus/Conrad bill would have no regulatory powers. "We wanted to create an institute that was purely informational," Bishop explained.

Because of this soft/informational approach, the Finance Committee did not submit S. 3408 to the Congressional Budget Office for scoring.

Bishop, a former CBO analyst, explained that the budget office did not view development of information as enough to justify estimates of savings. "They think it needs to be linked to payment or coverage" for budgetary impact, he said.

CBO, for example, could score savings if Finance would assure it that the education would equalize payments for treatments that were viewed as similar. Finance was not ready to make that assurance.

A more aggressive form of comparative effectiveness organization was included in the CHAMP child health legislation that passed the House, but stalled in the Senate, earlier this year. That bill would have given the Agency for Healthcare Research and Quality the task of conducting comparative effectiveness research. CBO also gave that approach a low savings score.

To keep the comparative research institute from becoming a cost control entity, Baucus would make it a non-government body. It would have a multi-stakeholder board appointed by the Government Accountability Office's Comptroller General, not the President or Congress.

The board would include representatives from patient groups, public and private payers, manufacturers, clinicians, health researchers, quality organizations as well as the HHS secretary, NIH director and AHRQ's administrator.

The Baucus institute would have been funded by a $1 per enrollee charge to insurance companies, a $1 per Medicare beneficiary payment from the government and $75 million to cover people under other government programs like Veterans health care and SCHIP. Total funding was estimated at $300 million per year. The method of funding kept the top Republican on Finance, Iowa Sen. Charles Grassley, from endorsing the bill as originally introduced.

- Cole Werble ([email protected])