A Menu without Prices

For the well-insured, obtaining health care in the United States is like dining in a sumptuous restaurant that has menus without prices. A price-free menu encourages diners to ignore cost when making their selections. Similarly, well-insured patients usually don't know the prices of medical services at the time they receive them. Even for common procedures, few hospitals list their charges, much less the accompanying professional fees and the out-of-pocket costs; these are only revealed weeks or months later, when the explanation of benefits statement arrives. Without prices, motivated patients cannot “shop around” for lower-cost providers of care—and even patients who knew the price could not easily learn whether the care represents good value.

Comparative effectiveness research can fill part of the information void. Legislators in Washington have never been more enthusiastic about supporting comparative effectiveness research, which compares interventions with the most relevant alternatives, not just placebo, and focuses on effectiveness in real-world practice (1). Policymakers recognize that patients and physicians need up-to-date information about which treatments work best. However, as they draft legislative language, they debate such issues as the funding mechanism, the administrative structure of the responsible agency, the mechanisms for ensuring accountability, and the scope of the work (2, 3). Among these topics, the role of cost-effectiveness information may be the most controversial. The American College of Physicians, in a closely reasoned and deeply informed position paper (4), forcefully argues that this issue should be beyond debate: Cost-effectiveness analysis is essential to the work of any agency dedicated to comparative effectiveness.

As they note, objections to cost-effectiveness analysis often center on methodological concerns. Many studies, particularly old ones, have not followed recommended analytic practices (5), which is, as the American College of Physicians observes, a reason for insisting on adherence to accepted standards …