Wow! McClellan gets it right!

Medicare Covers New Treatments With a Catch

For the first time in its history, Medicare has systematically begun to make payments for new and expensive treatments and diagnostic tests conditional on agreement by companies or other groups to pay for studies on whether these new methods actually work on the Medicare patients who get them.

The move was decided by the agency’s recently appointed director, Dr. Mark McClellan, who said the goal was better and more cost-effective medicine.

The new initiatives began this year when Dr. McClellan, who is both an internist and an economist, decided that evaluating treatments for elderly Americans falls under Medicare’s purview to pay for whatever is medically necessary. If the treatment does not work, he argues, then it really is not medically necessary, and Medicare should not be paying.

Over the past six months, he has been fundamentally transforming Medicare’s scope by offering to pay for a number of new and expensive treatments and diagnostic tests – ranging from $30,000-a-dose cancer drugs to brain scans to diagnose Alzheimer’s – but with a catch. Patients can only have them if they enter into studies that evaluate how well they work. And someone other than Medicare will have to pay for those studies.

In the past Medicare just paid the bills or said no to treatments. Now, with a flood of promising but astronomically expensive treatments and little data on how they work in the real world, Medicare has decided to use its 41 million beneficiaries to get some answers. And it is using the threat of refusing to pay unless patients are in a study as a cudgel to get companies or foundations or professional groups to pay for the research.

The goal, Dr. McClellan said, is better and more cost-effective medicine.

“Instead of having 10 to 20 percent success rates over a broad population, we want to get to 80 to 90 percent who will benefit, and with fewer side effects,” he said.

The article goes on with much detail. Medicare now has raised the bar on new extensive pharmaceuticals and diagnostic tests. They will pay – but require data collection to determine the long term benefits. If these studies do not show significant benefits – we will know – and they will no longer pay. A few reactions:

Dr. Platt and other academic experts, as well as patient advocacy groups like the Center for Medical Consumers in New York, agree, and applaud the new Medicare initiative.

It is so compelling, said Dr. Robert Califf, director of the Clinical Research Institute at Duke University, that “almost regardless of your political philosophy, this makes sense.”

“We have an increasingly powerful array of drugs and devices and a bewildering array of choices,” he said. “And there is a broad agreement among people who make these choices that we don’t have the information we need.”

The dearth of information reached a crisis with cancer drugs, Dr. Tunis said, when new drugs, so-called biologics, began reaching the market.

With cancer drugs, he said, the tradition is to test new medications in situations that their makers think are most likely to show benefit. That leads to approval by the F.D.A. Then the drugs often come into widespread use off-label – doctors give them to patients with different cancers or in combination with other drugs, trying them out in new contexts. Medicare is required to pay for the original approved use and for uses listed in certain drug compendia. Other than that, Medicare payments for off-label uses are up to the discretion of local contractors to the agency. Some pay; others do not.

I obviously applaud this Medicare initiative. They have set a reasonable standard for increasing medical expenditures. We (society) must learn the impact of new technologies. We must collect data; report data and make decisions from those data. I hope (and expect) that private insurers will adopt this enlightened policy.

Hurray!!!!