HHS barred panel from considering mandate's cost effectiveness

Obama Contradicted: HHS Banned Determining Whether Mandate Was 'Cost Effective'
By Terence P. Jeffrey
February 16, 2012

CNSNews.com: - There would be no consideration of cost effectiveness.

That was the explicit condition that the Department of Health and Human Services imposed on the panel of health-care experts it commissioned to develop the “preventive services” mandate that will require virtually all health-insurance plans in the United States to cover sterilizations and contraceptives—including those that cause abortions.

The fact that HHS prohibited the panel from considering the cost effectiveness of the mandate it developed contradicts President Obama’s declaration at the White House last Friday that his administration had adopted the panel’s recommendations precisely because they will “make the overall cost of health care lower”



One economist who served on the panel, meanwhile, suggested in a dissenting opinion that the panel’s recommendations in fact might not be cost effective and that the panel’s process for arriving at its recommendations “tended to result in a mix of objective and subjective determinations filtered through a lens of advocacy.”

The Patient Protection and Affordable Care Act (aka Obamacare) that Obama signed in 2010 included a provision that all new health care plans would be required to cover “preventive services” without charging any fees or co-pay to the insured. The law allowed the secretary of health and human services to determine which “preventive services” would be mandated for women.

HHS commissioned and funded a committee of scientists, operating under the auspices of the Institute of Medicine (a part of the National Academies of Sciences), to recommend which “preventive services” for women should be included, cost free, in all insurance plans.

The panel—The Committee on Preventive Services for Women--had only 6 months to do its work and met only 5 times. On July 19, 2011, it issued a report with its recommendations. These included the following: "The committee recommends for consideration as a preventive service for women: the full range of Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity."

Less than two weeks later, on Aug. 1 of last year, HHS Secretary Kathleen Sebelius issued the panel's contraception-sterilization recommendation as a new federal regulation—set to take effect on Aug. 1 of this year.

In its report, the committee had noted the short time in which it had to work and repeatedly reiterated HHS's order that it could not consider cost effectiveness in determining its recommendations.

“The committee met five times within six months,” the report said.

“The cost-effectiveness of screening or services could not be a factor for the committee to consider in its analysis leading to its recommendations,” the report said.

“However, it should be noted that the committee did not have adequate time or resources to conduct its own meta-analyses or comprehensive systematic review of each preventive service,” the committee warned.

“Finally,” the committee said, “cost-effectiveness was explicitly excluded as a factor that the committee could use in developing recommendations, and so the committee process could not evaluate preventive services on that basis.”

“Furthermore,” the committee said, “for consistency in approach with the other three guidelines used by the ACA and given the time limitations for this study, the committee was restricted from considering cost-effectiveness in its process for identifying gaps in current recommendations.”

One of the 16 members of the panel—Prof. Anthony Lo Sasso an economist at the University of Illinois at Chicago’s School of Public Health--issued a dissenting report. He criticized the panel’s process for lack a rigorous analytical method and for filtering things "through a lens of advocacy.” He also suggested there was good reason to believe the panel's recommendations might not be cost effective.

“Readers of the Report should be clear on the facts that the recommendations were made without high quality, systematic evidence of the preventive nature of the services considered,” Lo Sasso wrote. “Put differently, evidence that use of the services in question leads to lower rates of disability or disease and increased rates of well-being is generally absent.

“The view of this dissent,” wrote Lo Sasso, “is that the committee process for evaluation of the evidence lacked transparency and was largely subject to the preferences of the committee’s composition. Troublingly, the process tended to result in a mix of objective and subjective determinations filtered through the lends of advocacy. An abiding principle in the evaluation of the evidence and the recommendations put forth as a consequence should be transparency and strict objectivity, but the committee failed to demonstrate these principles in the Report.”

Lo Sasso also raised a question about the potential cost effectiveness of offering some preventive services for free because it would create a “benign moral hazard”—leading more people to utilize the free service.

“Whether coverage of preventive service leads to a reduction in healthcare expenditure depends on the fraction of enrollees using the service before the service becomes covered and the magnitude of the response among enrollees who experience the reduction in out-of-pocket price,” wrote Lo Sasso. “Knowing how elastic patient demand is to preventive services is a critical element to a coverage decision even if one already has good estimates of the effectiveness and cost-effectiveness. This is self-evidently a useful parameter to know for any preventive service because it highlights the impact that first-dollar coverage of the service will have, perhaps in relation to other forms of outreach.”

Because the committee was not given the time to do a serious analysis of the real impact of the recommended “preventive services,” Lo Sasso recommended that Secretary Sebelius not mandate the services “until such time as the evidence can be objectively and systematically evaluated.”

Despite the fact that this scientifically panel charged with coming up with the recommended preventive services had been expressly forbidden from looking at their cost effectiveness, President Obama declared that his administration had moved forward with the recommendations precisely because of their cost effectiveness.

“As part of the health care reform law that I signed last year, all insurance plans are required to cover preventive care at no cost,” Obama said last Friday at the White House. “That means free check-ups, free mammograms, immunizations and other basic services. We fought for this because it saves lives and it saves money--for families, for businesses, for government, for everybody. That’s because it’s a lot cheaper to prevent an illness than to treat one.
“We also accepted a recommendation from the experts at the Institute of Medicine that when it comes to women, preventive care should include coverage of contraceptive services such as birth control,” said Obama. “In addition to family planning, doctors often prescribe contraception as a way to reduce the risks of ovarian and other cancers, and treat a variety of different ailments. And we know that the overall cost of health care is lower when women have access to contraceptive services."