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Insurance fee will fund government research on drug effectiveness

Starting in 2012, the government will charge your health insurance plan a new fee for research to find out which drugs, medical procedures, tests and treatments work best.

The goal of the research, part of a little-known provision of President Obama's health care law, is to answer such questions as whether that new prescription drug really works better than an old generic one that costs much less.

But in the politically charged environment surrounding health care, the idea of medical effectiveness research is eyed with suspicion.

The Patient-Centered Outcomes Research Institute -- a quasi-governmental agency created by Congress to carry out the research -- has yet to commission a single head-to-head comparison, though its director is eager to begin.

The government is already providing the institute with funding. The $1-per-covered person insurance fee goes into effect in 2012. But the Treasury Department says it's not likely to be collected for another year. The fee doubles to $2 in its second year and then rises with inflation.

"The more concerning thing is not the institute itself, but how the findings will be used in other areas," said Kathryn Nix, a policy analyst for the conservative Heritage Foundation think tank. "Will they be used to make coverage determinations?"

The institute's director, Dr. Joe Selby, said patients and doctors will make the decisions, not his organization.

"We are not a policy-making body; our role is to make the evidence available," said Selby, a primary care physician and medical researcher.

But insurance industry representatives say they expect to use the research and work with employers to fine-tune workplace health plans. Employees and family members could be steered to hospitals and doctors who follow the most effective treatment methods. Patients going elsewhere could face higher copayments, similar to added charges they now pay for "non-preferred" drugs on their insurance plans.

Major insurers already are carrying out their own effectiveness research, but it lacks the credibility of government-sponsored studies.

Much of the medical research that doctors and consumers rely on now is financed by drug companies and medical device manufacturers, who have a vested interest in the findings. And a drugmaker only has to show that a new medicine is more effective than a sugar pill -- not a competing medication -- to win government approval for marketing.

Lawmakers have hedged the new institute with caveats. It was set up as an independent nonprofit organization. The government cannot dictate Selby's research agenda. And there are limitations on how the Health and Human Services department can use the research findings in decisions that affect Medicare and Medicaid.

Selby said the institute is taking seriously the term "patient-centered" in its name. Patients will not be merely subjects of research; they and their representatives will be involved in setting the agenda and overseeing the process.

"We are talking about patients as partners in the research," Selby said.

Selby expects to unveil the institute's proposed research agenda in the next few weeks.

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