Redirecting Innovation in U.S. Health Care: Options to Decrease Spending and Increase Value

Marc Notes: RR-308--Page 4 of cover.; Includes bibliographical references (pages 91-105). Table of Contents: Preface -- Figures -- Summary -- Acknowledgments -- Abbreviations -- Chapter 1. Introduction -- Project Goals -- What Determines Value for Health Care Products? -- Chapter 2. The Context for Medical Product Innovation -- Three Stages of Innovation -- Primary Actors in Inventing Medical Products -- Drug and Device Companies -- HIT Companies -- Goals of Medical Product Inventors -- Private Investors -- Financial Incentives of Medical Product Inventors -- Influencers of Medical Product Invention -- National Institutes of Health -- U. S. Food and Drug Administration -- U. S. Patent and Trademark Office -- Office of the National Coordinator for Health Information Techno logy -- Primary Actor and Influencers in Approval of Medical Technologies -- Primary Actors in Adoption of Medical Products -- Physicians -- Hospitals -- Influencers of Providers -- Summary: Context for Medical Product Innovation -- Chapter 3. Methods -- Literature Reviews -- Technical Expert Panel -- Expert Interviews -- Case Studies -- Policy Options -- Chapter 4. Analysis -- Lack of Basic Scientific Knowledge -- Lack of an Adequate Knowledge Base Can Hinder Product Inventors -- Sources of Financial Support for Increasing Basic Scientific Knowledge -- Federal Funding Is Critical to Expanding the Basic Scientific Base -- Case Study Summary. Haemophilus influenzae Type b (Hib) Vaccine -- How Scientific Uncertainty Affects Medical Produce Invention -- Costs and Risks of FDA Approval -- Could the FDA Ensure Safety with Quicker and Less Costly Processes? -- Delays Entail Both Health and Financial Costs -- Case Study Summary: A Cardiovascular Polypill -- Unpredictability and Ineffective Communication Complicate the Approval Process -- FDA Caution May Be a Root Cause of Regulatory Delay -- Case Study Summary: Avastin for Metastatic Breast Cancer -- Regulatory Risk Figures Prominently in Investment and Invention Decisions -- Flow Regulators Uncertainty Affects Investment and Invention -- Limited Rewards for Medical Products That Could Lower Spending -- Many Patients and Providers Are Fairly Insensitive to Prices -- Generous Health Insurance Tends to Reduce Consumers' Sensitivity to Price -- Fee-for-Service Payment Also Tends to Reduce Price Sensitivity -- Lack of Price Transparency Also Reduces Price Sensitivity -- Medicare Is Not Allowed to Consider Costs in Coverage and Reimbursement Decisions -- Limited Time Elorizons and Fragmented Decisionmaking -- Case Study Summary: Electronic Health Records -- Inadequate Rewards for Products That Decrease Spending -- Implications for Inventors and Investors -- Treatment Creep -- Case Study Summary: Implantable Cardioverter-Defibrillator -- Manufacturers Can Promote Low-Value Use -- Case Study Summary: Prostate-Specific Antigen -- Defensive Medicine Is a Form of Treatment Creep -- Off-Label Use of Medical Products Is Widespread, but Health Effects Are Unknown -- It Is Difficult to Control Undesirable Instances of Off-Label Use -- Treatment Creep Can Substantially Affect Incentives for innovators -- Medical Arms Race -- The Classical Medical Arms Race -- The New Medical Arms Race -- Expensive and Controversial Medical Equipment Remains Prominent -- Case Study Summary: Robotic Surgery -- What Drives the Medical Arms Race? -- The Medical Arms Race Can Substantially Affect Incentives of Inventors -- Chapter 5. Policy Options to Improve the U. S. Medical Product Innovation System -- Options to Reduce Costs and Risks of Invention and Approval -- Enable More Creativity in Funding Basic Science -- Offer Prizes for Inventions -- Buy Out Selected Patents -- Establish a Public-Interest Investment Fund -- Expedite FDA Reviews and Approvals for Products That Decrease Spending -- Implementation Challenges -- Options to Increase Market Rewards -- Reform Medicare Payment Policies -- Reform Medicare Coverage Policies -- Coordinate FDA Approval and CMS Coverage Processes -- Increase Demand for Products That Could Decrease Spending -- Produce More and More-Timely Technology Assessments -- Case Study Summary: Telemedicine -- Summary -- Chapter 6. In Conclusion -- Appendixes -- A. Cost-Effectiveness and Value -- B. An Economic Model of Innovation -- References. Publisher Marketing: New medical technologies are a leading driver of U. S. health care spending. This report identifies promising policy options to change which medical technologies are created, with two related policy goals: (1) Reduce total health care spending with the smallest possible loss of health benefits, and (2) ensure that new medical products that increase spending are accompanied by health benefits that are worth the spending increases. Contributor Bio:  Garber, Steven Steven Garber is the principal of The Washington Institute for Faith, Vocation & Culture, which is focused on reframing the way people understand life, especially the meaning of vocation and the common good. A consultant to foundations, corporations and schools, he is a teacher of many people in many places. The author of The Fabric of Faithfulness, he is also a contributor to the books Faith Goes to Work: Reflections from the Marketplace and Get Up Off Your Knees: Preaching the U2 Catalogue. He lives with his wife, Meg, in Virginia. Contributor Bio:  Gates, Susan M Susan M. Gates is an economist at RAND specializing in the areas of industrial organization, political economy, and applications of economic management principles to public sector organizations.