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BACKGROUND
"... in medicine, it is characteristic of our
technology that we do not count the cons, ever,
even when the bills begin coming in....It is, in
part, explainable by our history, by the brand
newness of any kind of technology at all in this
field, and our consequent unfamiliarity with any
methods, or indeed, any incentive in the first
place, for technology assessment in medicine."
(Thomas, 1972)
In a relatively short span of recent years medical technology* has
developed at an awesome rate, presenting new ways to prevent, detect,
and treat disease. But those same technological developments also
have alerted us to the necessity that we "count the cost," in Lewis
Thomas's phrase, and have provided ttincentive...for technology
assessment in medicine."
Hundreds of new technologies enter the health care system each
year, and the pace of their development indicates no slackening in the
foreseeable future. The benefits of the new technologies often are
clear and convincing. Computed axial tomographic (CAT) scanners can
reveal more clearly than prior techniques the anatomic abnormalities
of a brain tumor, and now positron emission tomographic (PET) scanners
can trace the chemical abnormalities created by disease. Antibiotics
and vaccines have removed infectious diseases from their paramount
position as a cause of death in industrialized nations. Surgical
equipment and procedures enable the res "oration of a damaged heart or
the replacement of a failing kidney. In many instances the new tech-
nologies have improved the results of care, have reduced the cost of
care, and even have increased access to care.
In other instances the new technologies have posed risks to
patients. Some risks are intrinsic to the technology; others 'are
related to the skill with which it is applied or to the setting in
which it is used. Some new technologies are increasing the cost of
health care, sometimes dramatically (Altman, Blendon, 1979; Moloney,
Rogers? 1979~. Health care costs are now at an all-time high, repre-
senting more than 10 percent of the gross national product (U.S. Public
Health Service, 1982~. Costs of the Medicare program and the federal
*For purposes of this report ~ medical technology is defined as a drug,
device, medical or surgical procedure, or combination of the above and
the knowledge necessary for their appropriate use in the delivery of
patient care.
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portion of Medicaid increased from $31.5 billion in 1976 to more than
$70 billion in 1981 (Health Care Financing Administration, 1983~.
Although there are many explanations for the increase in expenditures,
some of it is related to the use of technology. More costly care,
particularly in a time of economic strain, should force attention on
the appropriateness of all health care procedures, including the tech-
nologies involved. A new technology is not necessarily synonymous
with an improved technology, but its use can spread rapidly and
widely. Only later may well~esigned research validate that new is
better--or show that it is less ef ficacious (Of f ice of Technology
Assessment, 1978~.
There clearly is a need to develop better methods and better
organizational strategies for distinguishing useful new medical tech-
nologies from those that are wasteful or even harmful. The principal
objective in assessment of medical technology is the improved health
of people (Institute of Medicine, 1977~. A timely scientific assess-
ment of new medical technologies can help (~) to promote the use of
technologies that have been shown to be more ef f icacious or equally
efficacious but less costly than others' (2) to ensure that new techno-
logies are made available only af ter they are shown to have benef its
that outweigh their risks, (3) to curb the use and spread of techno-
logies that lack efficacy or cause preventable hem, and (4) to provide
evidence to guide appropriate use of all technologies, new and old
(Institute of Medicine, 1979~.
The worth of technology assessment in medicine goes far beyond its
warranty to the patient and its utility to the health care profession-
al. The results of assessment are also needed by the hospitals and
other facilities that buy and apply technologies, by industries that
develop technologies, by the professional societies that disseminate
information to health care practitioners, and by the insurance com-
panies 5 government agencies, and corporate health plans that pay for
the applications of technologies. A strategy for assessing medical
technology' therefore, must take into account not only the methods of
assessment ~ but also the needs ,, demands, and resistances of the parti-
cipants and beneficiaries in the process and products of assessment.
The fairly recent appreciation of the need for medi Cal technology
assessment has created numerous efforts to satisfy that need. In the
private sector, for example, professional societies such as the
American Medical Association and the American College of Physicians
developed formal mechanisms for accumulating evidence on the proper
use of technology and for d inseminating this information. Hospital
groups and associations such as the Alliance for Engineering in
Medicine and Biology and the Association for the Advancement of
Medical Instrumentation have an interest in and contribute to the
assessment of technologies in clinical practice.
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In the public sector, the Food and Drug Administration of the U.S.
Public Health Service has as a principal activity assuring the safety and
efficacy of pharmaceuticals and medical devices. The National Institutes
of Health several years ago began efforts in technology assessment by
means of awarding grants for clinical trials and consensus development
conferences. The Office of Technology Assessment (OTA), an arm of the
U.S. Congress, operates a program to assess medical technology for the
main purpose of providing accurate information and practical alternatives
for congressional decision makers in developing health policies. Other
federal agencies whose activities include health care, such as the
Veterans Administration and the Department of Defense, also have become
engaged in medical technology assessment.
Congress passed legislation in 1978 establishing the National Center
for Health Care Technology (NCHCT) to conduct, sponsor, and coordinate
the assessment of new and existing technologies. The government's Health
Care Financing Administration, as well as other third-party payers used
the information generated by the NCHCT to help in making decisions about
coverage and payments. However, the NCHCT was abolished in 1981. The
Office of Health Technology Assessment, based in the National Center for
Health Services Research of the U.S. Public Health Service, has assumed
some functions of the NCHCT.
The end of the NCHCT, however, did not signal an abatement of
congressional interest in new approaches to assessment of medical
technology. The 1983 amendments to the Social Security Act (P.L. 98-21)
authorize the creation of a Prospective Payment Assessment Commission,
appointed by the director of the congressional Office of Technology
Assessment, and give it broad powers, including medical technology
assessment and the evaluation of the appropriateness of medical practice
patterns. The commission, recently activated, could have considerable
impact on technology assessment and its relationship to federal payments
for health care. The body already has gained the sobriquet of "DRG
Commission" for its planned relationship to the diagnosis-related groups
that will form the basis for prospective payments for health care
services under the federal Medicare program.
Specifically, the DRG Commission is to collect and assess information
on costs, productivity, technological advances, and cost-effectiveness
of hospital services. The commission is expected to synthesize existing
data in framing its recommendations on reimbursement rate setting, where
those data are available, but it is also empowered to carry out research
and to award grants and contracts for research purposes, specifically
research that will inform its judgments about diagnosis related groups
and prospective payment rates. A major provision of this legislation
allows the commission to obligate Medicare Trust Fund resources for
external research activities, with the approval of the DHHS Secretary.
The range of responsibilities of the commission, and its power for
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awarding external grants and contracts for projects in technology
assessment, make it likely that the proposed body will become a major
contractor for assessment projects.
Two other recent and germane Congressional developments may be
cited. Rep. Henry Waxman, Democrat of California and chairman of the
House Energy and Commerce Subcommittee on Health and the Environment,
introduced a bill (H.R. 2350) to reauthorize the National Institutes
of Health that included a $4 million item to re-establish the National
Center for Health Care Technology. And Ben. Edward Kennedy, Democrat of
Massachusetts and ranking minority member of the Senate Committee
on Labor and Human Resources, introduced a bill (S. 814) to "control
health's escalating costs," which also would create an "Advisory
Committee on Health Care Technologies and Procedures" under the admin-
istrative supervision of the Institute of Medicine and funded as an
administrative cost of the Medicare program.
Although there are many agencies and organizations conducting
programs in assessment and dissemination of information about medical
technology, there currently is no private or public sector entity char-
ged to coordinate and synthesize information produced by the various
agencies and organizations and to provide a meeting ground apart from
the regulatory framework for purposes of technology assessment. Most
existing entities are not positioned to approach technology assessment
with both a scientific and a social perspective. For example, govern-
ment agencies such as National Institutes of Health (NIB), Food and Drug
Administration (FDA) , Centers for Disease Control (CDC), and the Health
Care Financing Administration (HCFA) are limited in their mandates.
in their mandates
FDA's legislative charge is the safety and efficacy of drugs and
devices; it does not deal with procedures or with economic and ethical
issues. HCFA, on the other hand, is a major payer whose efforts
are-addressed primarily to cost issues associated with the Medicare and
Medicaid programs. Private sector organizatione--American Medical
Association, American Hospital Association, the Blue Cross and Blue
Shield Association, the Health Insurance Association of America, and
others--nerve constituents with a variety of focused concerns.
University faculty and research groups conduct many of the
assessments of medical technologies based on primary data, principally
by means of controlled clinical trials. Several university research
units conduct other types of quality medical technology assessment, but,
their ef forts tend toward detailed examinations of a few areas of
intere st .
Consequences of these many and varied approaches to medical techno-
logy assessment include hampering the emergence and application of
potentially valuable new technologies and tardiness in retiring obsolete
technologies, as well as compromised credibility with the health profes-
sions and the public. Promotion of promising procedures and techniques
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in health care may be more likely to depend on perceived marketability
than on potential or proved contributions to patient care. The
identification of an outmoded technology is cumbersome at best, and
depends on the gradual accretion of reports in the literature and at
professional society meetings until they constitute a consensus for
change.
Poor dissemination of information from good technology assessment
contributes to the ris ing cos ts of health care. Conversely, the Blue
Cross and Blue Shield Association, for instance, estimates that its
Medical Necessity Program has saved premium payers as much as 500
million dollars in its first five years. Studies at UCLA and Harvard
commissioned by the NCHCT estimated that 100 to 200 million dollars per
year could be caved by the Medicare program if NCHCT recommendations not
to reimburse for six technologies were followed (Harvard, 1981; UCLA,
19813. Also, in the training of health professionals, the lack of
coordinated dissemination of valid technology assessment information
means that curricula quite possibly will not include current clinical
knowledge.
The lack of an organization with the credentials to coordinate and
complement existing efforts in medical technology assessment has
prompted several proposals for the formation of an entity that could
assume those functions (Bunker, 1982; Perry, 1982; Relman, 1980, 1982~.
Government officials, members of the Institute of Medicine, practicing
physicians, and other health industry leaders have requested at various
times that the Institute call together the parties appropriate to a
discussion of the feasibility of a new entity to lead medical technology
assessment efforts. Further, there were suggestions that the conferees
consider a role for the Institute in the establishment of such a new
entity.
The Institute was viewed as an appropriate convener partly because
it is designed by its charter to have a membership of expertise and
authority in many disciplines of health care and the related profes-
sions. One of the Institute's principal functions is the assembling of
the most appropriate and knowledgeable persons from the membership and
elsewhere to conduct studies and produce objectively balanced reports on
issues of health policy. The Institute for a decade has provided a
neutral forum where representatives of public and private interests can
meet, removed from parochial involvements, to discuss mutual concerns.
In addition, the Institute has a long history of activities in the
assessment of medical technology, beginning with a policy statement in
February 1968 that heart transplantation was a research venture and not
an accepted routine clinical procedure (Board on Medicine, 1968~. Later
the Institute (1973) produced reports cautioning against the adverse
economics of the artificial heart, setting an application and payment
framework for computed axial tomographic (CAI) scanning (1977), examining
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policy and research issues basic to the impacts of new technology on the
health care system (with the Assembly of Englneering) (1979~, and
developing research methods for evaluating technologies in clinical use
1981~. Also$ the Institute recently convened ~ conference on cost-
effective medical cares part of wbicb centered on increased efficiency
in practice through the application of new technologies.
. .
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Representative terms from entire chapter:
care financing
