FNMA: A History Lesson
Greenspanism Looking Pretty Good...


Peter Orszag:

http://www.cbo.gov/ftpdocs/95xx/doc9563/07-16-HealthReform.pdf: Anesthesiology provides one example of a great success story in putting evidence- based standards into practice. In the mid-1980s, after analyzing the most common sources of errors, the American Society of Anesthesiologists promulgated standards of optimal practice (both in procedures and equipment).6 Providers had an incentive to follow the standards because deviations from them made the imposition of malpractice liability more likely. After the standards were adopted, mortality rates fell to about 5 per million encounters, as compared with averages above 100 per million during earlier periods.7 Thus, aggressively promulgated standards backed by some incentives can alter a long-standing and suboptimal status quo.

Research suggests, however, that the merely providing information to physicians results in an “exceedingly modest behavioral response.”8 The current financial incentives for both providers and patients tend to encourage or at least facilitate the adoption of expensive treatments and procedures, even if evidence about their effectiveness relative to existing therapies is limited. Costly services that are known to be highly effective for some patients are sometimes provided to others for whom the clinical benefits have not been rigorously demonstrated. Therefore, to alter providers’ behavior, it is probably necessary to combine comparative effectiveness research with aggressive promulgation of standards and changes in financial and other incentives.9

6 See Jeffrey B. Cooper, “Getting Into Patient Safety: A Personal Story,” AHRQ WebM&M: Morbidity and Mortality Rounds on the Web (Agency for Healthcare Research and Quality, August 2006), available at http://www.webmm.ahrq.gov/perspective.aspx?perspectiveID=29.

7 See David Hyman and Charles Silver, “You Get What You Pay For: Result-Based Compensation for Health Care,” Washington and Lee Law Review (Fall 2001).

8 David E. Kanouse, Joel Kallich, and James P. Kahan. “Dissemination of Effectiveness and Outcomes Research,” Health Policy, vol. 34, no. 3 (1995), pp. 167–192.

9 See Congressional Budget Office, Research on the Comparative Effectiveness of Medical Treatments: Issues and Options for an Expanded Federal Role (December 2007).