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Monograph of the Council: on Heals Care Technology Assessment of Diagnostic Technology in Health Care Rationale, Methods, Problems, and Directions Harold Sox, Susan Stern, Douglas Owens, and Herbert L. Abrams Institute of Medicine NATIONAL ACADEMY PRESS WASHINGTON, D.C. 1989

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THE INSTITUTE OF MEDICINE was chartered in 1970 by the National Academy of Sciences to enlist distinguished members of appropriate professions in the examination of policy matters pertaining to the health of the public. In this, the Institute acts under both the Academy's 1X63 congressional charter responsi- bility to be an adviser to the federal government, and its own initiative in identifying issues of medical care, research, and education. THE COUNCIL ON HEALTH CARE TECHNOLOGY was established in 1986 by the Institute of Medicine of the National Academy of Sciences as a pu~ic-pnvate entity to address issues of health care technology and technology assessment. The council is committed to the well-being of patients as the fundamental purpose of technology assessment. In pursuing Hat goal, the council draws on the services of the nation's experts in medicine, health policy, science, engineering, and industry. This monograph was supported in part by a grant to the Council on Health Care Technology of the Institute of Medicine from He National Center for Health Services Research of the U.S. Deparunent of Health and Human Services (grant 5 R09 HS055 26 02~. The opinions and conclusions expressed here are those of the authors and do not necessarily represent the views of the Department of Health and Human Services, the National Academy of Sciences, or any of their constitu- ent parts. Library of Congress Catalog Card Number 89-62666 International Standard Book Number 309-04099-X Additional copies of this report are available from: National Academy Press 2101 Constitution Avenue, NW Washington, DC 20418 Printed in the United States of America S033 First Printing, November 1989 Second Printing, September 1990

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Council on Health Care Technology Chairman WILLIAM N. HUBBARD, JR. Former President The Upjohn Company Co~hairman JEREMIAH A. BARONDESS Irene F. and I. Roy Psaty Distinguished Professor of Clinical Medicine Cornell University Medical College Members HERBERT L. ABRAMS Professor of Radiology Stanford University School of Medicine RICHARD E. BEHRMAN Dean, School of Medicine Case Western Reserve University PAUL A. EBERT Director American College of Surgeons PAUL S. ENTMACHER Senior Vice-President and Chief Medical Director Metropolitan Life Insurance Company MELVIN A. GLASSER Director Health Security Action Council BENJAMIN L. HOLMES Vice-President and General Manager, Medical Products Group Hewlett-Packard Company GERALD D. LAUBACH President Pfizer Inc. WALTER B. MAKER Director, Employee Benefits and Health Services Chrysler Corporation WAYNE R. MOON Executive Vice-President and Operations Manager Kaiser Foundation Health Plan, Inc. LAWRENCE C. MORRIS Senior Vice-President, Health Benefits Management Blue Cross and Blue Shield Association FREDERICK MOSTELLER Roger I. Lee Professor (Emeritus) Howard School of Public Health MARY 0. MUNDINGER Dean, School of Nursing Columbia University ANNE A. SCITOVSKY Chief, Health Economics Department Palo Alto Medical Foundation GAIL L. WARDEN Chief Executive Officer Group Health Cooperative of Puget Sound . 111

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PREFACE In the recent past the interests of different groups concerned with health care have focused on the use of medical technologies~heir ~m- pacts on safety, efficacy, and effectiveness; cost-effectiveness and cost- benefit; quality; and their social, legal, and ethical implications. The sum of these varied interests is the field of health care technology assessment. The Council on Health Care Technology was created to promote the development and application of technology assessment in health care and the review of health care technologies for their appropn ate use. The council was established as a public-pr~vate enter se at the Institute of Medicine, a component of the National Academy of Sciences, through the Health Promotion and Disease Prevention Amendments of 1984 (P.L. 98- 551, later amended by P.L. 99-1171. In 1987 the U.S. Congress extended support for the council as a public-private venture for an additional three years (by P.~. 100-1771. The goals and objectives of the council, as stated in the report of its first two years of operations, are "to promote the development and application of technology assessment in medicine and to review medical technologies for their appropn ate use. The council is guided in its efforts by the belief that the fundamental purpose of technology assessment is to improve well-being and the quality of care." In pursuing these goals, the council seeks to improve the use of medical technology by developing and evalu- ating the measurement criteria and the methods used for assessment, to promote education and training in assessment methods, and to provide technical assistance In the use of data from published assessments. The council conducts its activities through several working and liaison panels. Members of these panels reflect a broad set of interested constitu- encie~physicians and other heady professionals, patients and their fami- lies, payers for care, biomedical and health services researchers, manufac- turers of health-related products, managers and administrators throughout the health care system, and public policymakers. In addition, it carries out councilwide activities that utilize the specific assignments of more than one panel. This monograph contributes to the series of occasional publications produced by the council in carrying out its several missions. It examines two issues of special concern to the council~ollection of primary data

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CONTENTS Introduction Herbert L. Abrams I. Rationale for Assessment of Diagnostic Technology 2. The Use of Diagnostic Tests: A Probabilistic Approach 3. Assessment: Problems and Proposed Solutions......... 4. Primary Assessment of Diagnostic Tests: Bamers to Implementation 5. Costs and Sources of Funding......... . 6. A National Program for Assessing Diagnostic Technology 7. Problems of Multi-Institutional Studies The Authors ................... ~ V11 8 . . . 23 5s 73 107 ..... 120 . 129 ....... 143

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