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The impact of comparative effectiveness research on health and health care spending

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  • Basu, Anirban
  • Jena, Anupam B.
  • Philipson, Tomas J.

Abstract

Comparative effectiveness research (CER) is thought to identify what works and does not work in health care. We interpret CER as infusing evidence on product quality into markets, shifting the relative demand for products in CER studies. We analyze how shifts in demand affect health and health care spending and demonstrate that CER may raise or lower overall health when treatments have heterogeneous effects, but payers respond with product-specific coverage policies. Among patients with schizophrenia, we calibrate that subsidy policies based on the clinical trial CATIE may have reduced overall health by inducing some patients to switch away from schizophrenia treatments that were effective for them towards winners of the CER.

Suggested Citation

  • Basu, Anirban & Jena, Anupam B. & Philipson, Tomas J., 2011. "The impact of comparative effectiveness research on health and health care spending," Journal of Health Economics, Elsevier, vol. 30(4), pages 695-706, July.
    • Handle: RePEc:eee:jhecon:v:30:y:2011:i:4:p:695-706
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    5. Tomas J. Philipson & Dana Goldman, 2007. "Integrated Insurance Design in the Presence of Multiple Medical Technologies," American Economic Review, American Economic Association, vol. 97(2), pages 427-432, May.
    6. Anirban Basu, 2009. "Individualization at the Heart of Comparative Effectiveness Research: The Time for i-CER Has Come," Medical Decision Making, , vol. 29(6), pages 9-11, November.
    7. Jena, Anupam B. & Philipson, Tomas J., 2013. "Endogenous cost-effectiveness analysis and health care technology adoption," Journal of Health Economics, Elsevier, vol. 32(1), pages 172-180.
    8. Aaron A. Stinnett & John Mullahy, 1998. "Net Health Benefits: A New Framework for the Analysis of Uncertainty in Cost-Effectiveness Analysis," NBER Technical Working Papers 0227, National Bureau of Economic Research, Inc.
    9. Anupam B. Jena & Stéphane Mechoulan & Tomas J. Philipson, 2010. "Altruism and Innovation in Health Care," Journal of Law and Economics, University of Chicago Press, vol. 53(3), pages 497-518.
    10. Pauly, Mark V. & Blavin, Fredric E., 2008. "Moral hazard in insurance, value-based cost sharing, and the benefits of blissful ignorance," Journal of Health Economics, Elsevier, vol. 27(6), pages 1407-1417, December.
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    Cited by:

    1. Kristopher J. Hult, 2017. "Measuring the Potential Health Impact of Personalized Medicine: Evidence from MS Treatments," NBER Working Papers 23900, National Bureau of Economic Research, Inc.
    2. Basu Anirban, 2013. "Personalized Medicine in the Context of Comparative Effectiveness Research," Forum for Health Economics & Policy, De Gruyter, vol. 16(2), pages 107-120, June.
    3. Boone, Jan, 2013. "Does the market choose optimal health insurance coverage?," CEPR Discussion Papers 9420, C.E.P.R. Discussion Papers.
    4. Jena, Anupam B. & Philipson, Tomas J., 2013. "Endogenous cost-effectiveness analysis and health care technology adoption," Journal of Health Economics, Elsevier, vol. 32(1), pages 172-180.
    5. Anirban Basu, 2012. "Estimating Person-Centered Treatment (PeT) Effects Using Instrumental Variables," NBER Working Papers 18056, National Bureau of Economic Research, Inc.
    6. Basu, Anirban, 2011. "Economics of individualization in comparative effectiveness research and a basis for a patient-centered health care," Journal of Health Economics, Elsevier, vol. 30(3), pages 549-559, May.
    7. Michael R. Eber & Cass R. Sunstein & James K. Hammitt & Jennifer M. Yeh, 2021. "The modest effects of fact boxes on cancer screening," Journal of Risk and Uncertainty, Springer, vol. 62(1), pages 29-54, February.
    8. Evans, H. & Basu, A, 2011. "Exploring comparative effect heterogeneity with instrumental variables: prehospital intubation and mortality," Health, Econometrics and Data Group (HEDG) Working Papers 11/08, HEDG, c/o Department of Economics, University of York.
    9. Mousnad, Mohamed Awad & Shafie, Asrul Akmal & Ibrahim, Mohamed Izham, 2014. "Systematic review of factors affecting pharmaceutical expenditures," Health Policy, Elsevier, vol. 116(2), pages 137-146.
    10. Amitabh Chandra & Anupam B. Jena & Jonathan S. Skinner, 2011. "The Pragmatist's Guide to Comparative Effectiveness Research," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 27-46, Spring.
    11. Boone, J., 2013. "Does the Market Choose Optimal Health Insurance Coverage," Other publications TiSEM f7691fbf-f770-4714-b1b4-1, Tilburg University, School of Economics and Management.
    12. Basu, Anirban, 2015. "Welfare implications of learning through solicitation versus diversification in health care," Journal of Health Economics, Elsevier, vol. 42(C), pages 165-173.
    13. Anirban Basu & Anupam B. Jena & Dana P. Goldman & Tomas J. Philipson & Robert Dubois, 2014. "Heterogeneity In Action: The Role Of Passive Personalization In Comparative Effectiveness Research," Health Economics, John Wiley & Sons, Ltd., vol. 23(3), pages 359-373, March.
    14. Kristopher J. Hult, 2018. "Measuring the Potential Health Impact of Personalized Medicine: Evidence from Multiple Sclerosis Treatments," NBER Chapters, in: Economic Dimensions of Personalized and Precision Medicine, pages 185-216, National Bureau of Economic Research, Inc.
    15. Anirban Basu & David Meltzer, 2012. "Private Manufacturers’ Thresholds to Invest in Comparative Effectiveness Trials," PharmacoEconomics, Springer, vol. 30(10), pages 859-868, October.

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    More about this item

    Keywords

    Cost-effectiveness analysis Comparative effectiveness analysis Technology assessment;

    JEL classification:

    • I0 - Health, Education, and Welfare - - General
    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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