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Health Care Costs: The Role of Technology Alliance for Health Reform 20 th Anniversary Series

Health Care Costs: The Role of Technology Alliance for Health Reform 20 th Anniversary Series May 29, 2012 Joseph R. Antos, Ph.D. Wilson H. Taylor Scholar in Health Care and Retirement Policy American Enterprise Institute. The power source for proton beam therapy. $140 million +.

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Health Care Costs: The Role of Technology Alliance for Health Reform 20 th Anniversary Series

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  1. Health Care Costs: The Role of Technology Alliance for Health Reform 20th Anniversary Series May 29, 2012 Joseph R. Antos, Ph.D. Wilson H. Taylor Scholar in Health Care and Retirement Policy American Enterprise Institute

  2. The power source for proton beam therapy $140 million +

  3. High cost of advancing technology Source: Keith Kasper, “The Cost of Hospital Care,” National Health Policy Forum, October 8, 2010

  4. Better technology, better care… • 16th century: “couching” a clouded lens with a thick needle • 1960s: inpatient operation, with patient’s head held in place for 2 weeks with sand bags • “Intracapsular cataract extraction” • Today: outpatient procedure completed in an afternoon • “Phacoemulsification” • Better technology, more successful results Greater demand, more spending

  5. Overuse, underuse, misuse Aspirin vs. Angioplasty Decline in Death from Coronary Disease, 1980-2000 1A: aspirin, heparin, warfarin, anti-hypertensives, β blockers, diuretics; B: statins, ACE inhibitors, IIa/IIb antagonists, thrombolytics; C: angioplasty/stents, CABG, cardio-pulmonary resuscitation, cardiac rehabilitation Source: Amitabh Chandra and Jonathan S. Skinner, ”Technology Growth and Expenditure Growth in Health Care,” NBER, April 2011

  6. Most spending, least evidence More Tests, Not More Procedures Additional Spending on Physician Services for Highest Cost Patients1 1Compares spending of Medicare patients in the highest quintile with those in the lowest quintile using the end of life expenditure index Source: Elliott Fisher et al. , “The Implications of Regional Variations in Medicare Spending,” Annals of Internal Medicine, February 18, 2003

  7. Effectiveness research not enough • Effectiveness is NOT the same as value • Value depends on clinical effectiveness, impact on quality of life, and cost • Effectiveness studies at best reflect the average patient—there is variation in response • Effectiveness studies at best reflect the average provider—there is variation in performance • Moving target—continual change in technology, professional judgment, public expectations What lies below the surface?

  8. Can we spend better? • Providers • Professional consensus • New business structures • Consumers • Information • Financial incentives • Changed expectations • Medicare • Coverage with evidence development • Centers of excellence • FFS payment reform • Premium support • Private insurance • Coverage policy • Selective provider networks • VBID

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