Cost Effectiveness a Taboo Conversation

If I had a pill that would extend your life by one day, but it cost a billion dollars, it’s unlikely that many people would argue that health insurance should pay for it. We all understand that while the benefit might be real and quantifiable, it’s not worth the expense. But what if the pill cost a million dollars? And what if it extended your life by 10 years?

Such discussions are about cost effectiveness. For the most part, we’re avoiding them when we talk about health care in the United States.

Some think that discussing cost effectiveness puts us on the slippery slope to rationing, or even “death panels.” After all, if we decide that the billion-dollar-for-a-day-of-life pill isn’t worth it, then what’s to stop us from deciding that spending a couple hundred thousand dollars to extend grandma’s life for a year isn’t worth it either?

In fact, we in the United States are so averse to the idea of cost effectiveness that when the Patient Centered Outcomes Research Institute, the body specifically set up to do comparative effectiveness research, was founded, the law explicitly prohibited it from funding any cost-effectiveness research at all. As it says on its website, “We don’t consider cost effectiveness to be an outcome of direct importance to patients.”

As a physician, a health services researcher and a patient, I have to disagree. I think understanding how much bang for the buck I, my patients and the public are getting from our health care spending is of great importance.

Research in this area can be difficult to perform. One of the reasons is that it’s not always easy to measure health outcomes. Some things, like death, can be relatively easy to define, but how do you quantify having diabetes, asthma or a seizure disorder?

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary