Medicare could cut costs by using comparable effectiveness

Comparable effectiveness could help Medicare to achieve cost control without limiting access to beneficial treatments, according to an article in Health Affairs.

One of the issues with the Medicare system is that it pays for the treatment that physicians order, regardless of the outcome and cost of the treatment, according to the authors.

The article outlines a plan that would allow expensive new treatments three years to prove that they worked better than cheaper treatments, or their reimbursement rates would be cut to that of the cheaper treatments.  Some insurers are experimenting with similar policies.

(Sources: Health Affairs,, November, 2010; The New York Times,, October 21, 2010)