New Therapies Pose Quandary for Medicare

By GINA KOLATA
http://www.nytimes.com/2003/08/17/health/17LUNG.html

The federal Medicare program is expected to decide this week whether to pay for an aggressive and expensive lung operation that could offer a lifeline to tens of thousands of elderly patients.

But health economists and medical experts say the treatment, however alluring, is part of an unsettling trend: new and ever pricier treatments for common medical conditions that are part and parcel of aging — procedures that could potentially benefit tens of thousands of patients, at a total cost that would far exceed the kind of prescription drug benefit now being considered by Congress.

The questions, these experts say, are how much Medicare can or should pay, and whether cost-effectiveness should enter into the decisions.

The procedure under consideration this week is an operation for people with severe emphysema, whose lungs are so scarred that they are constantly out of breath. In keeping with its policies, the government's Center for Medicare and Medicaid Services has consulted with medical experts and professional societies and says it expects to issue its decision as early as tomorrow.

The story of the operation, health economists say, is a case study of the troubling and thorny questions that Medicare administrators face as they try to live within the constraints of the $267.8 billion-a-year federal program.

Some say the operation can transform patients' lives.

"If your parents had this condition, you would seek this operation for them," said Dr. Joel Cooper, a lung surgeon at Washington University in St. Louis who developed the operation. Others point to a recent study indicating that its benefits are modest, at best.

But all agree that the patients are severely ill, with no other options. And all agree that the operation is expensive. A recent analysis showed that patients who had the operation had medical bills averaging nearly $63,000 the first year, compared with $13,000 for similar patients who had not had it.

Estimates of the number of potential patients vary from 1 percent to 15 percent of the nation's two million emphysema patients, or as many as 300,000 people, at a total cost of $1 billion to $15 billion.

For now, said Dr. Sean Tunis, the chief medical officer at the Center for Medicare and Medicaid Services, "nobody has a good estimate on how big this population of patients is."

Complicating the issue are other similarly expensive procedures that are on the horizon or have been approved recently. For example, Medicare is to decide next month on devices for patients with congestive heart failure, whose hearts are so damaged they can barely pump.

The devices, known as L.V.A.D.'s, for left ventricular assist devices, can help failing hearts pump. Dr. Annetine Gelijins and Dr. Alan Moscowitz of Columbia University, who did an economic analysis, said they expected about 5,000 Medicare patients a year to get the devices at first, but that as many as 60,000 have heart damage so severe that they might need them.

At $60,000 per device, and with an additional $150,000 in hospitalization charges, the price for L.V.A.D.'s could range from $1.05 billion to $12.6 billion a year.

A recent clinical trial involving very sick people indicated that the devices were effective. But Dr. Alan Garber, a physician and economist at Stanford University, said the question was not whether they worked.

"The big question is, `In whom else does it work?' " he said. "The people in the trial had extraordinarily severe congestive heart failure and were being kept alive in intensive care units. That's the tip of the iceberg in congestive heart failure."

"We seem to be getting new technologies that are effective for common conditions, like congestive heart failure, like emphysema," he went on. "If you are talking about a treatment for a rare genetic disorder that affected 500 or even 1,000 patients a year it would not make much difference. But in the case of L.V.A.D.'s, or with lung volume reduction surgery, the potential number who will get it is quite large so it will force the issue. How are we going to make it available to Medicare beneficiaries without wrecking the Medicare budget?"

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Dr. Tunis, of the Medicare services center, says he understood that the costs of new technologies can be staggering. But he adds that cost has traditionally not been a consideration in deciding what to cover.

"If the technology was effective, we would find a way to pay for it," he said. "There is no dollar value per life per year at which Medicare would decline to pay."

But costs are mounting.

The agency just approved implantable defibrillators, which can shock a failing heart, preventing sudden death. They cost $30,000 per patient.

Medicare restricted the devices to patients with specific patterns of disease, denying payment for them to about half of the million or more patients who could benefit, according to a large study. But now it is under intense pressure from doctors, patients and professional societies to expand its coverage to all those who met the study's criteria.

Then there are coated stents, tiny cages coated with drugs to prop open arteries and prevent the blood vessels from closing again. Each costs $3,200, compared with about $1,000 for the older, uncoated stents.

The million patients a year who get stents typically get more than one, with some getting four or five, said Dr. David Hillis, an interventional cardiologist at the University of Texas Southwestern School of Medicine, who called the increased use of defibrillators and coated stents "a good way to bust the budget wide open."

Medical experts say that in addition to the legitimate costs of each of these procedures, they fear technology creep — an increasing use of expensive procedures to wider and wider groups of patients, many of whom may not benefit and may even be harmed.

"I think it is huge, I think it is pervasive. And it is a major driver in Medicare's cost growth," said Dr. Scott Ramsey, a health economist at the University of Washington who analyzed the cost of lung volume reduction surgery. "The reason Medicare is cutting payments to doctors is that its expenses for technology are expanding so fast."

The emphysema operation, lung volume reduction surgery, sneaked up on Medicare about a decade ago.

Medicare never agreed to pay for the procedure. But unbeknownst to the agency, pay it did.

"None of the contractors in the Medicare system was aware that the operation was becoming more popular until it began being reported in journals," Dr. Tunis said.

In 1996, Medicare learned that it had paid for 3,000 patients and the numbers were growing fast. But there was a 17 percent mortality rate and no good evidence that the operation worked.

In response, the federal government started a clinical trial involving 1,218 patients. Medicare would pay for the operation only if patients participated in the trial, and if they joined the trial there was a 50 percent chance that they would be assigned to a control group that did not get the operation.

Dr. Tunis says the outcome of the trial will determine whether Medicare will cover the operation. But Dr. Ramsey, the University of Washington health economist, said the agency never stopped to consider "what would happen if the trial came out with uncertain results."

The data, published in May, were not quite the ringing endorsement that many had hoped for.

The study found a subgroup that seemed to benefit — patients with emphysema located mostly in the upper lobes of their lungs and little ability to exercise. They survived longer and could exercise more after they had the operation.

But that is not rigorous evidence, since any set of data will include small subgroups that benefit and others that are harmed. In evaluating trials of new drugs and procedures, the Food and Drug Administration does not accept such subgroup analyses, requiring a second trial for the subgroup that may benefit.

But a second trial of the lung operation is unlikely, many medical experts said. The first one was so controversial that some doctors would not participate, saying it would be unfair to their patients to deny them the surgery if they fell into the control group.

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"We felt it was not possible for us to look a patient in the eye and say, `We honestly don't know whether you are better off with this operation or without it,' " said Dr. Cooper of Washington University. He encouraged his Medicare patients to sue. "I went to court 28 times and won 28 cases," he said.

While some, like Dr. Ramsey, say that the clinical trial's results were far from a ringing endorsement of the operation, many lung surgeons disagree, saying that for the 25 percent of patients in the subgroup, the operation was a huge success.

Dr. Barry Make, who directs the emphysema program at the National Jewish Medical and Research Center in Denver, was struck by the survival benefit in the subgroup. "That result is stupendous," Dr. Make said, adding that many patients also felt better.

Dr. Ramsey and others worry that if Medicare approves the operation for the restricted group of patients like those in the subgroup, technology creep may lead to many more having the surgery.

Seventy percent of the nation's estimated two million emphysema patients have upper lobe damage. How will Medicare know whether a particular patient also has poor exercise capacity?

Dr. Cooper says the solution is to restrict the operation to a few centers of excellence where experienced surgeons will assess patients and decide who should have the operation.

Dr. Tunis agreed but said there were limits to how much policing Medicare could do, or wanted to do.

"We don't have a direct way of enforcing compliance with coverage, particularly in patient selection criteria," he said. "It's sort of an honor system. But a lot of these patient characteristics are somewhat subjective or qualitative."

And that, says Dr. Garber, is almost guaranteed to lead to overuse.

There is pressure from patients, doctors and hospitals to cover expensive new procedures, even if their benefits are modest. And that is understandable, Dr. Garber said. "If you the patient are insulated against the cost consequences of your decision, why not get the latest and greatest?" But, he added, there is a price to be paid.

One solution would be to greatly increase Medicare's budget. But that would mean tax increases. Another would be for Medicare to consider cost-effectiveness, rather than just effectiveness. But, Dr. Tunis said, every time that has been proposed, the agency has had to back down.

"This is the fundamental problem hidden behind the broader discussions of health care reform," Dr. Tunis said. "At the end of the day, somebody has to make the decisions one at a time about what people are going to get. But the reality is that we can't afford to pay for absolutely everything that provides some benefit."

So, Dr. Garber said, "Medicare is in a bind."

"The real question," he said, is "how can we inform the public better that, when they want to have access to health care, someone will pay and it will be them?"