Transcript 2007 Formulary Slides

CER Scoring Framework
Avalere Health
December 2007
Avalere Health LLC | The intersection of business strategy and public policy
Comparative Effectiveness Research
Will Be Most Sustainable if…
 Governing body that balances political influence and accountability
 Defined funding source
 Improved health outcomes
 Attributable savings
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Theoretical Costs and Savings Associated with CER
Federal Spending ($)
100
Year 10
Year 2
Year 20
0
Start-up and
administrative
costs
Research costs Behavior change
as a result of
research
The height, length, and slope of the graph is dependent
on the scope and approach of a CER proposal
Behavior change as a
result of payment and
coverage incentives
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Impact &
Measurement
Implementation
Infrastructure
Potential Costs and Savings Will Be Determined
by Design Characteristics of CER Proposals
Governance
Who will sit on the advisory board?
Funding
How will the initiative be funded?
Structure
What type of entity is created? Where is it
placed?
Scope
Which health care services are included in
the research agenda?
Analysis Methodology
Which research methods will be employed—
primary, secondary, combination?
Inclusion of
Economic Information
Which factors will be included/
prioritized?
Efficiencies
How will the results be applied and whose
behavior will be targeted?
How will effects of CER be monitored,
measured, and attributed?
© Avalere Health LLC
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Theoretical Costs and Savings Associated with CER
100
Federal Spending ($)
Health
system
efficiencies
Scope and
Methodology
Physician
discounting
of research
could mean
that no
savings are
realized
Governance,
Funding, and
Structure
Disruptive
technologies
could enter
market before
savings are
realized
0
Start-up and
administrative
costs
Research costs Behavior change
as a result of
research
The height, length, and slope of the graph is dependent
on the scope and approach of a CER proposal
Behavior change as a
result of payment and
coverage incentives
© Avalere Health LLC
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Legislation Will Define Governance
and Impact Entity’s Operations
Component
Consideration
Purpose
Provide guidance and establish research funding priorities
Create independent processes for reviewing and approving findings
Serve as channel for interested parties
Structure
 Quality of advisory board members’ participation will be influenced by design
structure (corporate board of directors vs. MedPAC or IoM models)
 Will impact ability for stakeholder participation
Impact on
Scoring
 Advisory board’s operational costs likely to be viewed as “insignificant” in CBO
terms (spending of less than $100 million usually considered rounding error)
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Various Funding Mechanisms Will Determine
Sustainability and Independence of CER Entity
Low
Outside Influence
Automatic or
Dedicated Funding
Mechanism
Taxes
Annual
Appropriations
Private
Contributions
Proposed Center for
Comparative Effectiveness
(Section 904 CHAMP 2007)
AHRQ Effective Healthcare
Program
(Section 1013 of MMA 2003)
High
Low
Stability of Funding
High
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Decisions About Structure Will
Impact Investment Requirement
$$$$
New
Government
Agency
Federal Investment
Expansion of
Existing Agency
$
Expansion of AHRQ or NIH
Quasigovernmental
Public-Private
Partnership
Institute of Medicine
National Quality Forum
Membership Based
Government
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CER Methodologies Require Different Investments
and Promise Varying Levels of Savings
Prospective Clinical Trials
Observational Studies
Federal Spending ($)
Systematic reviews
$0
-20
Time (years)
Time and relative costs and savings are theoretical and
meant for illustrative purposes.
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Inclusion of More Areas for Research Increases Amount of
Spending that Can Be Targeted and Potential Savings
Distribution of Health Services and
Supplies Spending*
Other
10%
Government Admin
and Public Health
Activities
15%
Hospital Care
32%
Nursing Home and
Home Health
9%
Prescription Drugs
11%
Physician and Clinical
Services
23%
Scope of Research
Narrow
Drugs only
Middle
Drugs, medical and
surgical treatments,
and procedures
Clinical
Drugs
Clinical and Cost
Drugs
Broad
All products and services,
physicians, plan designs,
and preventive medicine
*Source: Avalere Health analysis of National Health Expenditure Data for 2005.
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Manner of Adoption of Findings into Clinical Care
Will Impact Magnitude of Potential Savings
Coverage
Decisions
Potential to Create Savings
Reimbursement
Changes
Benefit Design
Decision
Support Tools
Dissemination
Patient/Physician Choice
Payer Mandate
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CER Stakeholders
Government
 CMS: Collects clinical effectiveness,
comparative effectiveness, and
technology assessment data and use
in NCD process
 AHRQ: Conducts comparative
effectiveness reviews, technology
assessments, and CEAs
 NIH: Conducts comparative
effectiveness studies and clinical trials
External
 Drug and Device Manufacturers:
Sponsor comparative effectiveness
studies and CEA
 Commercial payers/plans/
employers: Use clinical
effectiveness and cost to determine
reimbursement and coverage
 Patients: May alter the coverage,
payment, and availability of certain
treatments and services
 VA: Uses clinical and comparative
effectiveness studies and CEAs
 Providers: May alter reimbursement
and treatment guidelines
 FDA: Collects and uses CER
information for post market
surveillance
 Research Community: Likely
grantees for CER
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CER Influencers
Government
 CBO: Prominent in CER
discussion and development
 CMS: Collects clinical
effectiveness, comparative
effectiveness, and technology
assessment data and use in NCD
process
 AHRQ: Conducts comparative
effectiveness reviews, technology
assessments, and CEAs
 NIH: Conducts comparative
effectiveness studies and clinical
trials
 VA: Uses clinical and comparative
effectiveness studies and CEAs
 FDA: Requires information on
efficacy and safety
Existing Models
 Oregon’s DERP: Sponsors
comparative effectiveness
studies of drugs
 Washington State: Sponsors
technology assessments
 BCBS Evaluation Center:
Conducts reviews of clinical
effectiveness of services
Industry
 Drug and Device
Manufacturers: Sponsor
comparative effectiveness
studies and CEA
 Commercial Payers/Plans:
Use clinical effectiveness and
cost
 NICE: Uses technology
assessments
 Canadian Agency for Drugs
and Technologies in Health:
Sponsors technology
assessments
 Pharmaceutical Benefits
Advisory Committee in
Australia: Uses CEA for drugs
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