Revival? Prospects for a return to comprehensive and coordinated health technology assessment in America

KEYWORDS:

• Health technology assessment
• Cost-effectiveness analysis
• Pharmaceutical pricing
• Health care costs
• United States

1. Introduction

It is no secret that health care costs in the United States far exceed those of any other developed nation, and the gap is widening. In 2021, the U.S. spent nearly $13,000 per capita on health care; adjusted for purchasing parity, this was nearly $6,000 more than Germany, the next-closest comparator [1].

Coupled with this are equally stark statistics showing how little health the U.S. is actually buying with all this money. Life expectancy at birth, at 76.4 years, is at its lowest level in two decades [2]. While system ‘shocks’ like COVID-19 and the opioid crisis are affecting life expectancy in America and other countries alike, the U.S. nevertheless ranks 64^th worldwide, comparable to levels in Algeria and Panama and far below that of richer nations [3].

One of the strategies that many countries employ to ensure that population health is maximized for the amount of funding available is health technology assessment (HTA), a multidisciplinary approach that assesses both the clinical and economic value of health interventions, and frequently considers the opportunity costs—-the health and spending foregone—-associated with the funding of a new technology. The reasons for the concerning trends in both costs and health in the U.S. are myriad, and cannot be solved solely through HTA methods. Nevertheless, the U.S. currently has no systematic approach to HTA, which can highlight areas in the health system where price is not aligned with clinical benefit. Yet it wasn’t always this way; the history of HTA in the U.S. is layered and complex. The question is whether the U.S. can return to those roots and realize a new approach to a science it helped foster.

2. The history of HTA in America: It’s a bit of a ride

In 1972, the U.S. Congress created the Office of Technology Assessment (OTA) to advise and inform legislators about the potential effects, consequences, and implications of new technology applications [4,5]. The OTA operated across sectors, producing over 750 reports on a variety of topics in its 23-year existence. The OTA’s health program, initiated in 1975, was particularly influential, as it developed the first published conceptual approach to HTA, described the potential social impacts of health technology, provided a template for evidence synthesis that has been used worldwide, and was the first to directly integrate cost-effectiveness analysis (CEA) into the HTA framework [6]. These efforts served as a direct model for a pan-European effort to examine and formalize HTA in multiple settings [7].

But the OTA was abolished in 1995. Multiple reasons were cited for its demise, including its stance on the scientific credibility of Ronald Reagan’s ‘Star Wars’ defense program [8]; however, most agree that it was the result of a symbolic budget-cutting exercise by Congressional leadership, with OTA as a logical target because of its small size [5].

Efforts to sustain HTA continued with the National Center for Health Care Technology (NCHCT), which was funded in 1978 to inform coverage decisions for Medicare, the national insurance program for the elderly [9]. The NCHCT was small, with a staff of 20 and an annual budget of only $4 million, but created a unique public-private partnership to access a broad range of expertise and a multidisciplinary approach to HTA. The Center informed 75 Medicare decisions until its funding ceased in 1981 [9]. In this case it was special interests, including the device industry and the American Medical Association, who criticized the NCHCT as being only concerned with costs and interfering with the clinician-patient relationship [9].

3. America’s curious aversion to cost-effectiveness

The challenges experienced by the OTA and the NCHCT have been driven in no small part by criticisms of ‘rationing’ – why should data analysts get to decide what care we are entitled to? Many feel that this attitude is a health application of ‘American exceptionalism’ – the notion that the U.S. is unique in large part because choices and freedoms are unlimited [10].

This tension has been illustrated most clearly in attacks on CEA, which makes explicit the tradeoffs associated with investment in new technology. Medicare and the HTA agencies that still exist, the Agency for Healthcare Research and Quality (AHRQ) and the Patient-Centered Outcomes Research Institute (PCORI), are statutorily prohibited from integrating CEA into decision-making [11,12]. In particular, there is a strong lobby against the quality-adjusted life year (QALY), which is seen as discriminatory against the disabled and severely ill, and has fueled legislation to ban the use of the QALY in any government program [13].

4. “Green shoots”

Despite HTA’s tortured history stateside and the political battles that continue to rage, there have been some recent signs of life with regard to controlling health care costs. The government has been experimenting with bundled payment and ‘pay-for-performance’ mechanisms for health services as an alternative to the traditional approach of paying a fee for each service individually [14]. New options are also available to provide greater scrutiny of pharmaceutical prices. The emergence of the Institute for Clinical and Economic Review (ICER), a private-sector HTA organization that makes its reports freely available and holds public deliberative meetings, has given private payers an independent authority to consult in price and contract negotiations [15]. More recently, the new Inflation Reduction Act includes explicit provisions for price protections on prescription drugs, including caps on patient out-of-pocket spending, and for the first time in history, allowing Medicare to negotiate prices on a small set of drugs with a longstanding market presence and no generic competition [16,17].

Even with these developments, however, the incredibly complex nature of the American health system, the multiplicity of players involved in the supply and reimbursement chain for any given service, and the underlying expectation (rarely met) of unlimited choice may mean that cost mitigation in some sectors would worsen cost pressures in another.

5. Expert opinion

What is the end result of having no centralized body charged with ensuring that health investments yield real benefits for patients at a reasonable cost? It is as plain as the figures presented above – runaway costs without the health to show for it. Insurers react to cost pressures for prescription drugs by restricting patient access, because the leverage of any one US payer to negotiate on price is limited. And, despite all the noise about ‘rationing,’ we cannot pretend it does not exist in America as it does everywhere else. The difference here is that it is not centralized or transparent, decided on by individual payers in largely private discussions. As a result, access to care is subject to the particulars of a given coverage or formulary policy, with variable health impacts across the system.

So what is needed? The political headwinds appear to be too great to consider a central HTA authority within government, whether it relies on CEA or not. A public-private partnership that could be funded in part by government but with reliance on academic institutions and consultancies to do the work might be more palatable, particularly if overseen by a standards-setting body that could provide guidance on methods and process. Models for such an approach already exist, such as the National Academy (formerly Institute of) Medicine [18].

To meet the needs of US stakeholders, a homegrown HTA approach could include CEA along with budget impact and other forms of economic analysis, allow strong stakeholder partnerships, and serve as a testbed for novel approaches to value assessment [18]. In addition, given that prices are universally high in America not only for prescription drugs but also for many other health technologies and services, the remit for a US-based HTA body should be quite broad.

It is the case, however, that even the rigorous work done by ICER is limited by both its small size and consequent limited capacity for assessment as well as the lack of a formal mandate to implement HTA recommendations. Similarly, a public-private HTA partnership will only be effective if there is a commitment from government to consider its outputs in decision-making. Indeed, a set of reports submitted to the US government could provide a framework for negotiation of prices for all drugs (not just longstanding products) as well as provider and facility fees, activity that would undoubtedly influence the private payers as well.

6. Summary

Given the damning statistics on the health of Americans and the costs of health care in the US, many will be surprised that the US was not only on the vanguard of health technology assessment but also helped to drive the modern approach to HTA that is practiced worldwide. The dimming of the American HTA candle is not the only reason that costs have continued to escalate without any associated improvements in health, but it certainly has not helped. We desperately need the US to learn from the lessons of those countries it helped teach – only with a coordinated, central approach to understanding the evidence and determining the value of health technology can a principled and equitable decision be made about adopting it. Otherwise, America will eventually cease to be a hub of health innovation, as there will be no one left to treat.

Declaration of interest

D A Ollendorf was previously employed by the Institute for Clinical and Economic Review in the United States. The Center for the Evaluation of Value and Risk in Health, D A Ollendorf’s current employer, receives funding from drug and device manufacturers, academic institutions, and government agencies to support the development and maintenance of several research databases. The authors have no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed.

Reviewer disclosures

Peer reviewers on this manuscript have no relevant financial or other relationships to disclose.

Additional information

Funding

This paper was not funded.