John T. Bigalke

Providers should make their voices heard in the national debate over comparative effectiveness. It could have a significant impact on the U.S. healthcare system.

At a Glance

  • Comparative effectiveness research (CER) has the potential to improve health care and reduce costs, yet it is controversial.
  • Consumers need to learn about CER to understand its benefits and limitations.
  • Providers need to manage changing evidence about what constitutes best practices.

Clinical decisions about healthcare interventions, for individuals or populations, are not always informed by adequate evidence of the clinical effectiveness of those interventions. Similarly, massive investments in healthcare interventions are not necessarily driven by solid evidence of their relative effectiveness. Unfortunately, aligning care with evidence and comparing clinical options can be challenging because the evidence is weak for much of what we do in health care. Also, for some of what we do, the evidence is strong for a few targeted patients but merely promising for a larger number.

Generating better evidence about the costs and benefits of different healthcare treatment options-through research on the comparative effectiveness of those options-has the potential to bend the curve in healthcare spending and reduce inappropriate variation in the system. Yet of the U.S. annual healthcare expenditure of $21 trillion, less than 1 percent is currently invested in assessing the comparative effectiveness of available interventions.

A recent study profiled the comparative effectiveness systems of the United Kingdom, Australia, Canada, and Germany to better understand how the concept might affect the United States.a The study concludes that, if implemented correctly, comparative effectiveness research (CER) has the potential to fundamentally change the industry and to improve care and reduce healthcare costs for Americans. However, building the capacity to expand the study and monitoring of comparative effectiveness into current U.S. healthcare reform initiatives could prove to be a major financial and clinical challenge. As of this writing, too many unanswered questions need to be addressed about the impacts of CER on healthcare providers, health plans, life sciences companies, and consumers before widespread implementation can move forward.

Study Findings

The Deloitte study examined three clinical examples of comparative effectiveness studies across the four countries' national programs. The three examples are diagnostic screening detection (colon cancer), a pharmaceutical medication (the use of statins for treatment of elevated cholesterol), and a surgical procedure (treatment for benign prostatic hyperplasia). The study illustrates the complexity and diversity of uses of comparative effectiveness programs in these countries, and helps to identify potential benefits and limitations that may face the U.S. healthcare system as its stakeholders develop, fund, and implement comparative effectiveness programs.

The study found that national governments in Great Britain, Canada, Germany,  and Australia have responded with unique strategies to deal with evidence development in clinical and comparative effectiveness. The strategies have resulted in formalized programs that vary greatly by country, governance, accountability, reporting, and financing.

Great Britain and Australia have designed programs that are directly linked to decisions that determine national health benefits. Germany and Canada use the outcomes of their programs in an advisory capacity only for national health benefit decisions.

The study suggests that as the United States seeks to define a more comprehensive CER strategy, examining the characteristics of other national programs may provide some helpful examples as well as pitfalls. A cut-and-paste approach will not work here. Rather, a "tools, not rules" approach, with industry and policy-makers working side by side, could result in a comparative effectiveness model that delivers better value and lowers costs.

The study also concludes that although determining and understanding the evidence base underlying different clinical interventions is critical, building a value-driven, transparent, effective program for managing and disseminating the evidence to key stakeholders is just as important.

U.S. Comparative Effectiveness Initiatives

The American Recovery and Reconstruction Act of 2009 (ARRA) allocated $1.1 billion to research assessing the comparative effectiveness of healthcare treatments and strategies. The act also created a 15-member Federal Coordinating Council for Comparative Effectiveness Research-led by Carolyn Clancy, MD, director of the Agency for Healthcare Research and Quality (AHRQ), and Neera Tanden, JD, counselor to the Office of the Secretary of Health and Human Services (HHS)-to assist the agencies of the federal government, including HHS, the Department of Veterans Affairs, the Department of Defense, and others, in coordinating comparative effectiveness and related health services research ( The goal is to achieve reductions of $700 billion in costs over 10 years by determining what goes into healthcare spending that does not necessarily improve individual health care or provide high-quality health care.

As part of its initial work, the council developed a draft definition of comparative effectiveness, draft prioritization criteria, and a draft strategic framework for comparative effectiveness research activity. (See Defining Comparative Effectiveness below.) The council also conducted a series of public listening sessions to hear comments regarding comparative effectiveness research.

Meeting a June 30 deadline stipulated in ARRA, the council reported its recommendations about the approach HHS should take to implement a comparative effectiveness program. Highlights of its report include the following:

  • Research should focus on the needs of priority populations such as racial and ethnic minorities, persons with disabilities, persons with multiple chronic conditions, the elderly, and children.
  • Research should be in specific high-impact health areas, such as medical and assistive devices, surgical procedures, behavioral interventions, and prevention.
  • Investments should be made in data infrastructure to link current data sources to help answer CER questions.

Also on June 30, The Institute of Medicine (IOM) issued a list of 100 research priorities from a suggested list of 2,600, covering therapeutics, surgical, and device interests. High-prevalence chronic conditions such as back pain, obesity, and rheumatoid arthritis, are prominent in Initial National Priorities for Comparative Effectiveness Research ( )In IOM's evaluation, costs were not a factor in the prioritization scheme. The IOM report also recommends funding priorities for research in key areas such as the effectiveness of the medical home model and preventive health programs-topics prominent in many health reform proposals.b

A major focus of the IOM report is the recommendation to Congress to sustain the CER effort. Key areas cited include collaboration among federal agencies, the creation of data repositories for clinical and administrative input, building informatics workforce training programs, and promoting widespread use of comparative effectiveness by clinicians, health plans, and consumers.

Implications for Providers and Other Stakeholders

Comparative effectiveness research is timely and controversial, and it holds implications for all aspects of the discovery-research-care continuum.

Consumers, the ultimate beneficiaries of the products of this research, will require education to understand the research benefits-and limitations-as they apply to consumers' own healthcare decisions. Policy makers will need to develop or refine financial and research strategies as a national comparative effectiveness infrastructure is established. Health plans could leverage aggregate research results, but that might challenge variations in coverage decisions. Life sciences companies may experience changes in their business models and potential markets, depending on the partnerships and initiatives that arise from comparative effectiveness studies.

Although healthcare providers should benefit from increased access to information that is evidence-based, they will also need to manage changing evidence about what constitutes best practices. Four warrant consideration.

First, as adoption of health IT increases, decision-support capabilities will emerge that facilitate rapid identification and dissemination of disease-specific standards of practice, improve provider management with real-time outcomes data, prioritize therapies based on potential drug interactions and patient clinical profiles, and identify at-risk patients for earlier intervention. As a result, many physicians will agree that they are able to provide better care to patients and should, therefore, be supportive of comparative effectiveness efforts. However, lacking electronic health record capabilities, providers will be challenged to perform optimally in a comparative effectiveness era.

Second, the likelihood of CER-generated Medicare cuts and episode-based payments suggests that providers should re-evaluate clinical program priorities while pursuing models of physician-hospital integration that optimize efficiency and outcomes. Medical staff leaders, hospital trustees, and senior management should begin the process of determining how to optimize operating performance and prioritize capital investments-with information technologies and physician integration as major necessities-while challenging unnecessary expenditures on "bricks and sticks."

Third, CER has the potential to provide health plans with a more uniformly accepted framework for utilization review, provider profiling, safety and quality assessment, and medical management. The willingness of health plans to collaborate on measures, reporting metrics, and transparency programs, as an industry and with providers-a critical success factor-appears to be gaining some momentum during the debate about health reform. With the adoption of ICD-10, deeper refinement in defining diseases and conditions could potentially lead providers and health plans to develop even more customized medical management programs.

And fourth, comparative effectiveness offers useful tools to improve patient care and reduce avoidable errors. Physicians, hospitals, and allied professionals should keep an open mind in deciding whether comparative effectiveness, as it takes shape here, serves as a platform for tools before decrying its use as "rules." Policy-makers, health plans, and employers need to engage with providers in building a U.S. comparative effectiveness program predicated on tools, not rules.

Getting CER on Providers' Agenda

Most executive-level hospital administrators and clinical staff have limited awareness of comparative effectiveness and its potential impacts on their clinical and financial operations. Frankly, there is no uniform understanding of how to even define it. However, the likelihood that CER will be a component in the evolution of larger healthcare reform makes the topic a key provider agenda item.

There is no doubt that the U.S. healthcare system suffers from widespread inappropriate variation and waste. Solving this problem, however, requires collaboration and statesmanlike leadership. Comparative effectiveness, when appropriately implemented by policy-makers and industry stakeholders, has the potential to be an engine for renewed innovation in the design and delivery of evidence-based care-one that holds the promise of improved care and reduced costs for Americans. CER also could help to strengthen consumers' trust in the information that providers and other industry stakeholders disseminate about the effectiveness and safety of various treatment options. (See Consumers' Trust in Health Treatment Information Sources .)

Exhibit 1


However, the ultimate form that CER will take in the United States is as yet unclear: Will it be used primarily as a tool to inform clinical decisions, or will it be more restrictive-the official guidance that tells providers which healthcare interventions they must use? In either case, if hospitals and physicians hope to shape CER's role in the U.S. healthcare system, now is the time to provide input to the Federal Coordinating Council for Comparative Effectiveness Research, physician advocacy groups, and other organizations that are driving its development and implementation. 

John T. Bigalke, FHFMA, CPA, is vice chairman and U.S. industry leader, Health Sciences & Government, Deloitte LLP, Orlando, Fla., and a member of HFMA's Florida Chapter.


a. Comparative Effectiveness: Perspectives for Consideration, Deloitte Center for Health Solutions, May 19, 2009 (
b. To download the Deloitte Center for Health Solutions' report, The Medical Home: Disruptive Innovation for a New Primary Care Model, go to

Defining Comparative Effectiveness

While clinical and comparative effectiveness (CE) research generally falls under the umbrella of evidence-based medicine (EBM)-a set of principals and methods intended to ensure that, as much as possible, population-based policies and individual medical decisions are consistent with evidence of effectiveness and benefit-a consistent definition of CE does not yet exist.a

To provide a framework for its policies and initiatives, the Federal Coordinating Council for Comparative Effectiveness Research developed the following draft definition for CE:

Comparative effectiveness research is the conduct and synthesis of systematic research comparing different interventions and strategies to prevent, diagnose, treat, and monitor health conditions. The purpose of this research is to inform patients, providers, and decision makers, responding to their expressed needs, about which interventions are most effective for which patients under specific circumstances. To provide this information, comparative effectiveness research must assess a comprehensive array of health-related outcomes for diverse patient populations. Defined interventions compared may include medications, procedures, medical and assistive devices and technologies, behavioral change strategies, and delivery system interventions. This research necessitates the development, expansion, and use of a variety of data sources and methods to assess comparative effectiveness (

a. Eddy, D.M., "Evidence-Based Medicine: A Unified Approach," Health Affairs, 24 (1), 2005, p. 16.

Publication Date: Thursday, October 01, 2009

Login Required

If you are an existing member, please log in below. Username and password are required.



Forgot User Name?
Forgot Password?

If you are not an HFMA member and would like to access portions of our content for 30 days, please fill out the following.

First Name:

Last Name:


   Become an HFMA member instead