1. HSCI 678 Intro to US Healthcare System Biomedical Research, Technology, and Assessment Chapter 10 Dr. Tracey Lynn Koehlmoos

2. Introduction US enjoys reputation as world leader of biomedical research and health services technology US government actively supports research and advancement 1) Review the role of research 2) Developmental procedures 3) Use of technological assessment and its impact on expenditures

3. Biomedical Research Government interest and funding started in 1945 with $5 million dollars 2000, US government spent $25.3 billion—excludes drug company and private research funds!

4. National Institutes of Health NIH is controls much of the federal funds Comprised of 19 disease or condition specific institutes (ex. NCI) Focus shift from infectious to chronic disease Although Federal support of biomedical research is less than 4% of total health expenditures, the NIH budget has grown more than 100% between 1998 to 2003. Up to $27 billion in 2003

5. Health Services Technology Development of technology Dissemination Application

6. Steps in Development McKinley’s Development Model –1) Promising Report; –2) Professional & Organizational acceptance; –3) Public, state and 3 rd party payer endorsement; –4) Standard procedure & observational reports; –5) Randomized clinical trials; –6) Professional denunciation; and –7) Erosion and discreditation NOT ALL TECHNOLOGIES FOLLOW ALL STEPS

7. Effect of Technology on $$$ We pay for having the most advanced health services system on the planet. 16% GDP in 2005 50% of annual increase due to new tech. Examples: –Treated AIDS and End Stage Renal Disease –Coronary Artery Bypass Grafts –Clinical progress into other areas: psych disorders, substance abuse

8. Pharmaceuticals Drug development is important but not a huge proportion of US healthcare expenditures (as in France and Germany) Widely regulated industry –Food and Drug Administration (1906) –Regulates the production & dissemination of all drugs and medical devices –Controls the approval and marketing of Over The Counter (OTC) and prescription drugs

9. Criticism of FDA Review Review process always underfire Public and press clamor for new drugs without the lengthy waiting period (average from start to approval 7 years)

10. New Drug Development New drug development can take 12 years and is expensive (>$800 million from start to market) To protect health interest in unprofitable areas: –Orphan Drug Act 1983: Ensures that essential but low demand drugs remain available –National Childhood Vaccine Injury Act 1986: Limits legal actions and allows for review of vaccines that cause adverse reactions

11. Personal Health Drug Expenditures About 10% of total personal health expenditures (2005) 60% prescription drugs 40% OTC drugs Medicare Part D is specifically designed to reduce the financial impact of prescription drug purchases on senior citizens (2006)

12. Medical Devices Defined: Any item promoted for medical purpose that does not rely on a chemical action to achieve its desired effect. Most devices are used by providers (medical equipment, surgical tools) New products must have FDA approval

13. Durable Medical Equipment & Supplies Often overlooked, <2% of health expenditures Wheelchairs, dressings, prostheses Growth of elderly population brings increase expense Medicare and Medicaid are instituting controls in this area Waste, fraud and abuse (controls and checks)

14. Technology Assessment (TA) How do we know when a new procedure is ready for general application? Randomized Clinical Trials (RCT)—the Gold Standard in Research! Whose job is TA? –No centralized authority (parts to FDA, AHRQ) –Private sector? Hmmm…Periodic and more likely if it is cost effective

15. NIH Consensus Conferences Recommending treatment changes since 1976 NIH convenes panel of experts Develop and disseminate reports Example: Switch from radical mastectomy to Modified Radical mastectomy AND switch from MRM to BCS for ESBC.

16. Technological Reassessment Period Reassessment is necessary Variability by physician training and specialty (new field of research!) Why do some out-dated technologies linger? –Physician training –Lack of a good alternative –3 rd Party Payer continues to reimburse for it

17. Changes in Healthcare System Managed Care: Emphasis on cost savings –Focus on new outpatient technologies –Threats to drug industry (formularies, limits) Ethical Concerns –Misapplication or overuse (MRI for every headache?) –Futile care: providing care without benefit –Genetic research (Stem Cell)

18. Summary Technology and biomedical research make the US the world leader in healthcare services innovation Research, drugs, medical devices and surgical procedures are all part of the growing contributors to healthcare expenditures.