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CONCLUSIONS AND RECOMMENDATION The committee's conclusions, overall recommendation, and components of the recommendation follow. Organization THE COMMITTEE RECOMMENDS THE ESTABLISHMENT OF A MEDICAL TECHNOLOGY ASSESSMENT CONSORTIUM ASSOCIATED WITH THE INSTITUTE OF MEDICINE. In searching for the appropriate organizational structure, the committee was especially interested in the extent of governmental control, responsiveness to the needs of potential constituencies, and fuming of various organizational models that were public, private, or some hybrid of the two. Reasonable and effective approaches to such technical issues as energy regulation, consumer product safety, occupational health and safety, and technology assessment require that business and government become successful partners in accommodating divergent views (Fox, 1981~. Various government agencies approach technology assessment from different perspectives and with different needs. Likewise, industry and the professional groups have differing needs, concerns, and goals. One way to bring all these interests together, in the committee's view, is to establish an organization or forum outside the formal judicial, legislative, and regulatory processes of government. Two examples of organizations that have successfully accommodated divergent industry and government views are the National Institute of Building Sciences (NIBS) and the Health Effects Institute (HEI). NIBS is a private non-profit organization established by Congress to provide for the evaluation of building technology, and to facilitate the introduction and acceptance of desirable technologies at the federal, state and local levels (Fox, 1981~. NIBS received an initial five-year congressional authorization, and was mandated to provide its own financial support by no later than 1983 (PL 93-383, 1974~. Its first board of directors was appointed by the President of the United States but later was to be nominated by the housing and building industry and voted upon by the NIBS board. HEI was formed in 1980 as an independent entity to conduct assessments of the health effects of emissions from automobiles and trucks. Its research informs both the vehicle manufacturers and the Environmental Protection Agency, which writes and enforces air pollution 11

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regulations. HEI is directed by a board whose three members come neither from the affected industry nor from government (Fox, 1981~. It was given an initial federal 1 ine of credit in 1981 to begin developing its organi- zational add research capacity, and has secured agreement of 24 private companies to reimburse 50 percent of its operational expenditures, within the federal credit limit. This support--half public, half private--is expected to continue indefinitely (Powers, 1983~. The committee chose to blend these two examples, deciding that a private/public partnership for technology assessment could best be fostered under the auspices of a private non-profit organization, established either _ nova or as an appendage to an existing private non-profit corporation. A privately based organization was seen as likely to attract broader support from the private sector because it would be less subject to governmental pressures and perhaps more accessible and responsive to its supporters. Better coordinated, more balanced, and leas polarized assessments should be possible when conducted outside of a regulatory framework and in a neutral setting. The committee chose to name the new entity the Medical Technology Assessment Consortium. The committee recommends that the Medical Technology Assessment Consortium begin under the auspices of the Institute of Medicine, because of the expense and difficulties of establishing a new organization and because there are decided advantages for such a new effort if located in this component of the National Academy of Sciences. Such a locus would provide visibility and credibility for the new entity, would offer a clear indication of neutrality and objectivity, and would facilitate the recruitment of board members, senior staff, and panel members of high caliber. In addition, prior Institute experience with issues of technology assessment would be a resource for the activity of the new entity. The committee recognizes that a permanent relationship between the consortium and the Institute of Medicine may neither be desirable nor necessary and that the consortium might become an independent entity after a period of development. A reasonable developmental period, the committee felt, would be five years. Careful monitoring of growth and potential for independence should be formalized on an annual review basis while the consortium is in the Institute. One of the documents used by the committee in developing the organization of the new entity was a chart describing the mission, scope, role, funding, and functions of other existing or proposed technology assessment organizations (Appendix 1 ) . The committee determined that the following characteristics would be a desirable statement of the mission, scope, role, operations, and financial support of the new entity. 12

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Mission THE MISSION OF THE ENTITY IS MEDICAL TECHNOLOGY ASSESSMENT. FOR THE PURPOSES OF THIS ENTITY, MEDICAL TECHNOLOGY IS DEFINED AS A DRUG, DEVICE, MEDI CAL OR SURGICAL PROCEDURE, OR COMBINATION OF THE ABOVE AND THE KNOWLEDGE NECESSARY FOR THEIR APPROPRIATE USE IN THE DELIVERY OF PATIENT CARE . Scope MEDICAL TECHNOLOGY ASSESSMENT INCLUDES THE DEVELOPMENT AND EVALUATION OF EVIDENCE, OR THE EVALUATION OF EVIDENCE DEVELOPED BY OTHERS, CONCERNING EFFECTIVENESS, SAFETY, COST, COST-EFFECTIVENESS, UNINTENDED CONSEQUENCES, AND, WlIEN APPROPRIATE, THE POLICY IMPLICAT IONS OF THE DEVELOPMENT AND/OR USE OF A SPECIFIC TECHNOLOGY, COMklENSURATE WITH ITS STAGE OF DEVELOPMENT. IT MAY ALSO INCLUDE THE EVALUAt ION OF KNOWLEDGE, PROFES S IONAL COMPETENCE;, INDICATIONS, FACILITIES, AND PERSONNEL NECESSARY FOR APPROPRIATE USE. Role THE ROLE OF THE ENTITY IS TO PROMOTE THE EMERGENCE AND APPLICATION OF APPROPRIATE MEDICAL TECHNOLOGIES, AND THE RETIREMENT OF INAPPROPRIATE OR OBSOLETE HELICAL TECHNOLOG IES BY: o SERVING AS A CLEARINGHOUSE OF INFORMATION ON MEDICAL TECHNOLOGIES AND MEDICAL TECHNOLOGY ASSES SMENT o AS SEMBLING AND EVALUATING INFORMAT ION AND MAKING RECOMMENDAT IONS CONCERNING INDIVIDUAL MEDICAL TECHNOLOGIES o ACTING WHEN NECKS SARY AND APPROPRIATE TO STIMULATE, COORDINATE, UNDERTAKE, OR COMMISSION MEDICAL TECHNOLOGY ASSESSMENT, INCLUDING ACTIVITIES TILAT WOULD COMPLEMENT THOSE OF OTHERS 0 IDENTIFYING NEEDS IN THE ASSESStIE:NT OF SPECIFIC MEDICAL TECHNOLOGIES o DEVELOPING AD EVALUATING ASSESSMENT CRITERIA AD METHODS 0 PROVIDING EDUCATION, TRAINING, AND TECHNICAL ASSISTANCE IN THE USE OF MEDICAL TECHNOLOGY ASSESSMENT METHODS AND RESULTS. In identifying the breadth of functions of the proposed consortium, the committee chose to endow it with enough f legibility to be maximally responsive to its users. This flexibility should enable the consortium 13

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to evolve into as comprehensive an institution as is commensurate with its operational concept and finances. The committee recognized the breadth of the role it had defined, and consequently ordered the six primary functions by priority, both in terms of perceived need within the technology assessment community and in terms of the probability of funding for early implementation. Expecting that the consortium's initial operating capital may be relatively small, the committee proposes the clearinghouse function be established first. The principal components of the clearinghouse function, as described in the OPERATIONS section later in this report, are an information management system and a scanning and surveillance function. The committee recognized the complexity of setting up a truly expert clearinghouse, but that complexity would be greatly reduced by the consortium's association with the IOM/NAS. Current resources of the NAS complex that would aid the consortium's clearinghouse function include: the NAS Library, with state-of-the-art bibliographic and electronic retrieval capability; the IOM experience in convening its members and other experts for specific inquiries; and the information-gathering experience gained by this committee and the parallel Committee on Evaluating Medical Technologies in Clinical Use, which have become conversant with most other existing technology assess- ment entities and with rosters of entities in other countries developed by staff of the congressional Office of Technology Assessment. The committee endorses pluralism in technology assessment, believing that the involvement of multiple entities in technology assessment is desirable. The proposed consortium is not intended to replace or elimi- nate other assessment entities, but should be complementary to them. The consortium's products--evaluations, recommendations, reports--should be available both to other assessment entities and to the public. Because the consortium should have the capability to consider societal, ethical, legal, and other aspects of technology assessment, the statement of scope provides for the development and evaluation of all kinds of evidence about technological policy implications. Addressing policy implications, however, is deemed secondary to the consortium's prime task of providing evaluation information with which other entities can f ormulate policy. Although the committee did not delve into specific methods used in "technology assessment", it noted that the greatest research need is for the generation of primary data f or analysis. The mos t prevalent method of conducting assessments entails the synthesis and interpretation of primary research done by others--secondary analysis. However great the need for primary data development and analysis, the very high costs of such assessments require funding at a rate substantially greater than 14

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that which the committee felt the consortium could attract at the onset of its activities. Assessments requiring primary data likely would be conducted later in the consortium's existence. Governing Board THE INITIAL GOVERNING BOARD OF THE CONSORT IUM WILL BE APPOINTED BY, ITS TERMS OF OFFICE DETERMINED BY, AND ITS CHAIR DESIGNATED BY THE PRESIDENT OF THE NATIONAL ACADEMY OF SCIENCES, ON RECOMMENDATION OF THE PRES IDENT OF THE INSTITUTE OF MEDIC INK, FOLLOWING APPROPRIATE CONSULTATION. OFFICERS, OTHER THAN THE INITIAL CHAIR AND NEW BOARD MEMBERS, WILL BE NOMINATED AND ELECTED BY THE BOARD IN ACCORDANCE WITH SUCH BYLAWS AND OTHER RULES OF CONDUCT AS THE BOARD SHALL HAVE ADOPTED. THE BOARD HILL CONSIST OF 15 MEMBERS DRAWN FROM THE PUBLIC AND PRIVATE SEC TORS . It is the intention of the committee that board members will be representative of an array of expertises, but should not be represen- tative of specific organizational entities. Board members, selected from both private and public sectors, should be knowledgeable in such matters as the financing of health care, the provision of health care, the management of health care institutions, and research, development, and marketing of health care technologies. The responsibilities of the board will be to: o adopt by-laws for the consortium o set policy for the consortium o establish broad priorities for the consortium o employ the chief executive officer o approve the budget. The members of the initial board will take whatever actions are necessary to establish the consortium. Professional Staf f The new entity will require a highly qualified and committed staff. The chief executive officer, appointed by the board, will have responsibility for: 15

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recommending the organizational and operational s tructure of the consort ium managing the operations of the consortium, including developing budgets 0 employing s tat f o developing specific priorities and tasks consistent with board approval developing and recommending to the board technical review and evaluation panels developing funding sources o entering into contracts authorized by the board. Operations The management of the consortium will involve the interaction of several basic functions discussed briefly below. The organization should be able to accept and sort requests and problems, draw upon and manage relevant information, make evaluations' and report findings and recommendations. The organization should be able to evaluate and learn from its own performance. The organization also should be able to detect trends and developments that could affect the development, diffusion, and utilization of medical technology and the need for its assessment. The operations described below may be implemented in any of a number of organizational frameworks, depending upon such factors as the resources available to the consortiums its relationship to a parent organization, and preferences of its governing board and administration. O Information Management The organization should have the capability to acquires process, store, retrieve, and disseminate information. The acquisition of information includes the capabi- lity of seeking new information by conducting or sponsoring studies and other inquiries, as required by the decision making operation. 0 Scanning/Surveillance Beyond acquiring and managing information, the organization should have the capability of discerning indi- cations that merit its attention. These include trends, cycles, and new and projected developments in medical technology and other relevant fields. Changes in technology utilization patterns, relevant developments in biology, engineering, elec- 16

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tropics, and communications, population trends and disease patterns, political and international developments all are examples of indications to be picked up by the scanning operation and provided to other organizational operations as appropriate. O Issue Identification and Triage The organization will receive . ~ ~ ram both external and internal sources a broad variety of requests, problems and issues. It should be capable of accepting, identifying, clarifying, and sorting these. Some will be handled on a routine basis by staff, some will be referred to the decision making operation of the organization, and certain inquiries will be referred to outside agencies better able to handle them. o Recommendations The organization should have the capability of conducting evaluations or assessments in a timely and effective manner, and of rendering findings and recommendations. Decision processes and findings should be recorded in ways that facili- tate performance evaluation. Performance Evaluation The organization should have the capability of monitoring its own decisions, findings, and recommendations for internal management purposes. This entails maintaining records of information and processes used in making decisions and any expected outcomes or effects of those decisions, and comparing these with actual outcomes. Besides documenting the decision process, performance evaluation would provide information to the organization's decision makers to enable them to identify ways of improving their performance. Financial Support THE CONSORTIUM SHOULD BECOME SELF-SUFFICIENT AS SOON AS POSSIBLE. IN MOVING TOWARD SELF-SUFEICIENCY, IT SHOULD SEEK BOTH PUBLIC AND PRIVATE SEC rOR FINANCIAL SUPPORT. The committee determined that several different strategies should be used to secure sufficient funds for operating the Medical Technology Assessment Consortium. Two kinds of funds would be required: core support and project or program support. Ideally the private/public partnership in the enterprise would be reflected by 50 percent of funds coming from each sector. However, the ratio could vary depending on the organization's functions. The committee believes that an endowment would provide the most stability for the organization. One approach to an endowment would be to solicit a congressional appropriation to initiate the entity. 17

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Both the National Institute of Building Sciences (NIBS) and the Health Effects Institute (HEI) began with appreciable federal funding, NIBS through direct appropriations, and HEI through budgeted contribu- tions from the Environmental Protection Agency (Fox, 1981~. The NIBS Congressional commitment for support extended f ive years in declining appropriations of one million dollars in the first year to one-half million dollars in the fifth (PL 93-383, 1974) . In 1983, technically the sixth year, NIBS received a "last appropriation" of $1.42 million and was expected to be self-sufficient thereafter (Dillon, 1983~. This last appropriation may be the closest approximation to a congressionally appropriated "endowment". HEI had an initial one million dollar "line of credit" from the federal government, administered through the EPA, and the agreement of 24 automakers (8 domestic and 16 foreign) to contribute half of HEI' 6 operational expenditures. Federal budgetary reauthorizations in subsequent years have extended HEI's line of credit to $2.5 million, although its operational expenditures currently amount to only $640,000. With its major research efforts only beginning, HEI will have rapidly increas ing costs. The current federal budget will provide HEI with a $3 million line of credit in fiscal year 1984, and private sector agreements will match the federal share of HEI 's expenditures (Powers, 1983~. Other than the consortiums receiving a start-up congressional appropriation, an endowment might be obtained by pooling funds solicited from a number of interested parties, including industry, third-party payers, professional associations, foundations, and the like. Such sources and pooling of funds would permit maximum freedom of operation to the new entity. Another source of revenue for the organization might be in grants, contracts, or other research or fee-for-service arrangements. Such support for specific programs or projects might be available from both public and private sources. Most government support of the entity probably would come in the onm of grants or contracts for specific projects. Once launched,, the entity would have the ability to raise additional funds from publication fees, subscriptions, and conference registration fees. Potential users or supporters of services and products of the consort ium might include: 0 federal, state 5 and local governmental agencies 0 health care financing organizations 0 health and medical care professionals and related associations 18

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health care institutions manufacturers of health industry devices, drugs, and other products 0 employers o labor and consumer groups o academic and research institutions o individuals Membership fees or assessments were seen as less desirable sources of support because they might restrict the freedom of the organization by creating direct relationships with a given health industry, or because assessments would be very difficult to implement in a fair manner. A. In contemplating possible budget figures for such an organization, the committee found the budgets of other proposed or existing entities instructive (See Appendix 1~. The NCHCT had a yearly budget of approximately $3 million when it ceased to exist. During start-up years, the budget had been substantially smaller but was programmed to grow in size. Over its three-year life the NCHCT engaged in approximately 75 technology evaluations (Perry, 1982~. A budget was unspecified in the authorizing legislation for the proposed new DOG Commission, although a ceiling of 25 staff personnel was stipulated. Appropriation legislation recently passed by the Congress provides $1.5 million for the first year of that co~mission's operation. The largest budget for any entity was proposed by Relman (1980), who suggested that an assessment of two-tenths of one percent of total expenditures by private and public third-party payers would yield $100-$200 million for a new national program of support for a comprehensive system of technology assessment. The committee believes that because it would take time to hire staff, develop programs, and establish the consortium, first- and second-year operations might call for budgets of one-third and two-thirds of a million dollars, respectively. In the third year of development the consortium should have an operating budget of approximately $1 million. In subsequent years the consortium might require annual budgets substantially greater than $1 million, but such estimates might be better made during the first three years of development. An initial budget of $300,000 could support a small professional and clerical staff (including the chief executive 19

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officer), cover travel costs for the board members and a small number of panels, and would cover officing, supplies, telephone, printing, etc. This budget should be sufficient to support preliminary efforts needed to develop the coordinating and clearinghouse functions. As activities of the new entity grow, additional funds could be raised to parallel increasing functions. The committee felt that the new entity would have a better chance of surviving if it began as an organization of modest size, growing as its services increased in importance and effectiveness. 20