Illustrating Potential Efficiency Gains From Using Cost-Effectiveness Evidence To Reallocate Medicare Expenditures For Medical Technology

Boston, MA, USA – Researchers from the Center for the Evaluation of Value and Risk in Health (CEVR) at Tufts Medical Center have illustrated potential health gains from using cost-effectiveness evidence to inform Medicare resource allocation for medical technology.  Focusing on interventions evaluated through Medicare’s National Coverage Determination process – reserved for ‘big-ticket’ items, i.e., interventions deemed to have a significant impact on Medicare – the researchers estimated potential health gains and cost-savings from using cost-effectiveness evidence to reallocate expenditures.

In the study, “Illustrating Potential Efficiency Gains from Using Cost-Effectiveness Evidence to Reallocate Medicare Expenditures,“ the researchers used quality adjusted life years (QALYs), which account for quantity and quality of life, to measure health gains.  They found that simply increasing utilization of cost-saving technologies that are more effective and no more costly than available alternatives adds 270,000 QALYs, while accumulating $12.9 billion of savings.

When reallocating expenditures from less cost-effective interventions, e.g., ventricular assist devices for heart failure, or pancreas transplantation, to more cost-effective interventions, e.g., cardiac rehabilitation programs, or ultrasound image guidance for breast cancer screening, Medicare beneficiaries gained 1.8 million QALYs in aggregate terms, approximately 0.17 QALYs per affected individual.

“Medicare has been resistant to using cost-effectiveness information,” said lead researcher, James Chambers, PhD, “But our analysis shows that substantial potential health benefits and cost-savings are possible if the program adopted cost-effectiveness evidence.”


Value in Health (ISSN 1098-3015) publishes papers, concepts, and ideas that advance the field of pharmacoeconomics and outcomes research as well as policy papers to help health care leaders make evidence-based decisions. The journal is published bi-monthly and has over 8,000 subscribers (clinicians, decision makers, and researchers worldwide).

International Society for Pharmacoeconomics and Outcomes Research (ISPOR) is a nonprofit, international, educational and scientific organization that strives to increase the efficiency, effectiveness, and fairness of health care resource use to improve health.

For more information: www.ispor.org

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