How a dumb idea becomes a law
Commenter JD is appalled by how dumb our laws are.
Ezra, I find the following quote from the Courage article completely confusing and would be interested in your view on it:
"Under federal law, Courage's findings about efficacy can't alter the amount Medicare pays doctors for stenting. The government insurance program is legally barred from considering a treatment's benefits when deciding how much to pay doctors for doing a certain procedure. Private insurance carriers, in turn, generally base their rate schedule on Medicare's."
What kind of stupid rule is this? Where does it come from?
What kind of stupid rule is this? Well, JD, it's a good, old-fashioned American stupid rule, which is the best kind! The offending provision is on Page 376 of the Medicare Modernization Act (pdf), and my understanding is that similar legislation was adopted as part of the stimulus bill.
Where does it come from? Well, one answer is that it comes from Republicans who want to block rationing. But my understanding is that the more honest answer is that it comes from pharmaceutical and medical device interests who want to make sure that evidence that their treatments don't work as well as cheaper alternatives isn't allowed to interfere with advertisements and doctor outreach programs that imply their treatments work far better than cheaper alternatives. And in the face of this organized opposition, Democrats have largely backed down, hoping that the evidence will be sufficient to change practice standards and figuring that if they gather a lot of evidence, they can always allow Medicare to use it at some later date.
For more comment on this, see this old Steve Pearlstein column.
February 12, 2010; 4:48 PM ET
Categories: Health Economics
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