Court-Ordered Reimbursement for Unproven Medical Technology

Ferguson, John H.; Dubinsky, Michael; Kirsch, Peter

doi:10.1001/jama.1993.03500160086038

Cited by 26 publications

(7 citation statements)

References 9 publications

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“…Despite genuine efforts by Medicare offifi cials to use cost-effectiveness analysis to determine reimbursement and coverage decisions in the Medicare program, Congress has been unwilling to do so. In court, insurance contracts are often interpreted in favor of the insured, and courts are reluctant to use published scientific literature to make rulings about what should be covered and what should not (Ferguson, Dubinsky, and Kirsch, 1993). Given that Medicare reimburses without regard to the underlying value of health gains, or health gains relative to alternative treatments, it becomes very difficult for a private insurer, especially a single insurer, to take the lead on applying comparative effectiveness research (Chandra and Skinner, forthcoming).…”

Section: Resultsmentioning

confidence: 99%

The Pragmatist's Guide to Comparative Effectiveness Research

Chandra

Jena

Skinner

2011

Journal of Economic Perspectives

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Following an acrimonious healthcare reform debate involving charges of "death panels," in 2010, Congress explicitly forbade the use of cost-effectiveness analysis in government programs of the Patient Protection and Affordable Care Act. In this context, comparative effectiveness research emerged as an alternative strategy to understand better what works in health care. Put simply, comparative effectiveness research compares the efficacy of two or more diagnostic tests, treatments, or health care delivery methods without any explicit consideration of costs . To economists, the omission of costs from an assessment might seem nonsensical, but we argue that comparative effectiveness research still holds promise. First, it sidesteps one problem facing cost-effectiveness analysis—the widespread political resistance to the idea of using prices in health care. Second, there is little or no evidence on comparative effectiveness for a vast array of treatments: for example, we don't know whether proton-beam therapy, a very expensive treatment for prostate cancer (which requires building a cyclotron and a facility the size of a football field) offers any advantage over conventional approaches. Most drug studies compare new drugs to placebos, rather than "head-to-head" with other drugs on the market, leaving a vacuum as to which drug works best. Finally, the comparative effectiveness research can prove a useful first step even in the absence of cost information if it provides key estimates of treatment effects. After all, such effects are typically expensive to determine and require years or even decades of data. Costs are much easier to measure, and can be appended at a later date as financial Armageddon draws closer.

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Section: Resultsmentioning

confidence: 99%

The Pragmatist's Guide to Comparative Effectiveness Research

Chandra

Jena

Skinner

2011

Journal of Economic Perspectives

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“…But in practice there are additional constraints on insurance contracts that limit the availability of lower-cost, higher-value plans. In a world of evolving medical technology and complex care management, it is impossible to fully specify contingent contracts outlining all the care that individuals can receive in every state of the world, and private insurers have limited ability to deny coverage for procedures with unproven benefits when Medicare covers these technologies (Ferguson et al 1993).…”

Section: Private Health Spendingmentioning

confidence: 99%

“…When Medicare covers Provenge for prostate cancer (at a cost of over $90,000 for a few months of survival), private insurers are likely to follow the coverage decision to avoid litigation in which their patients claim that insurers are withholding valuable care (Ferguson et al 1993). Medicare regulatory boards evaluating new technology focus on whether drugs or procedures provide any benefits and are typically precluded from considering costs.…”

Section: Public Health Insurancementioning

confidence: 99%

Saving Money or Just Saving Lives? Improving the Productivity of US Health Care Spending

2012

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There is growing concern over the rising share of the US economy devoted to health care spending. Fueled in part by demographic transitions, unchecked increases in entitlement spending will necessitate some combination of substantial tax increases, elimination of other public spending, or unsustainable public debt. This massive increase in health spending might be warranted if each dollar devoted to the health care sector yielded real health benefits, but this does not seem to be the case. Although we have seen remarkable gains in life expectancy and functioning over the past several decades, there is substan-

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“…Similarly, Gerard Anderson (1992) argued that courts have expanded their influence over health policy by, for example, overturning insurers' coverage decisions and favoring hospitals, as opposed to states, in Medicaid rate-setting cases under the Boren Amendment. 14 Other commentators have also argued that courts have tended to side with individual patients against insurers in deciding whether expensive technologies are covered benefits (Ferguson, Dubinsky, and Kirsch 1993).…”

Section: Cea and Cost-containment In Medical Liability Casesmentioning

confidence: 99%

Cost-Effectiveness Analysis in the Courts: Recent Trends and Future Prospects

Jacobson¹,

Kanna²

2001

Journal of Health Politics, Policy and Law

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This article provides an initial look at how managed care organizations (MCOs) might incorporate cost-effectiveness analysis (CEA) into their decision-making process and how the courts might respond. Because so few medical liability cases directly involve CEA, we must look at other areas of the law to assess potential MCO liability for applying CEA. In general negligence cases, courts rely on a risk-benefit test to determine customary practice. Likewise, in product liability cases, courts use a risk-utility calculus to determine liability for product design defects. And in challenges to government regulation, courts examine how agencies use CEA to set regulatory policy. The results have been mixed. In product liability cases, CEA has led to some punitive damage awards against automobile manufacturers. But courts have integrated it in negligence cases without generating juror antipathy, and generally defer to agency expertise in how to incorporate CEA. The article discusses the implications of these cases for MCO use of CEA and outlines various options for setting the standard of care in the managed care era.

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Court-Ordered Reimbursement for Unproven Medical Technology

Cited by 26 publications

References 9 publications

The Pragmatist's Guide to Comparative Effectiveness Research

The Pragmatist's Guide to Comparative Effectiveness Research

Saving Money or Just Saving Lives? Improving the Productivity of US Health Care Spending

Cost-Effectiveness Analysis in the Courts: Recent Trends and Future Prospects

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