Comparative effectiveness research, one of the key tenets of federal health reform, “seems good on first blush” but will have a chilling effect on medical innovation, Cleveland Clinic CEO Dr. Toby Cosgrove said.
Comparative effectivess research (CER) refers to studying which types of treatment alternatives work best for a certain medical condition. Under health reform, Medicare and health insurance companies will pay a tax that’s expected to generate $500 million annually to support a government-appointed group that will oversee and set guidelines for CER.
Cosgrove fears that CER (as it was structured in federal health reform, at least) is “not good for innovators.” The problem is that if CER determines one treatment or product is the most effective for a certain condition, innovators will have little incentive to embark on the lengthy and expensive process of developing a new treatment for the condition.
Cosgrove made his comments as part of a panel discussion called “Perspectives from the top of the industry” at the Cleveland Clinic Medical Innovations Summit.
A fellow panelist, St. Jude Medical CEO Dan Starks, agreed with Cosgrove, calling CER “a wolf in sheep’s clothing.”
“There’s a role for it if it’s done well,” Starks said. “The risk is unintended consequences.”
Much of the other commentary from the panel — which also featured venture capitalist Harry Rein of Foundation Medical Partners, Xerox CEO Ursula Burns and John Sheets, senior vice president of corporate research at Boston Scientific — sounded like a campaign commercial for Rick Perry or Mitt Romney.
Corporate taxes are too high! The legal system needs tort reform! Government regulation is too burdensome! Give corporations a tax break to repatriate profits!
The rhetoric reached a new level when moderator Maria Bartimoro of CNBC claimed that capitalism “is under attack.”
A member of the next panel, Washington Post reporter Ezra Klein, provided a counterpoint, noting that corporate profits reached record highs in the midst of a recession and the top 1 percent of the country has reaped most of the economic gains of the past decade ’ which would seem to suggest that capitalism is thriving.