Photographer: Patrick Fallon/Bloomberg
Photographer: Patrick Fallon/Bloomberg

The growth in Medicare costs continues to be slow, in what is perhaps the most encouraging fiscal development for the U.S. in decades. If the health-care system is to continue to provide better value for Americans, policy makers need to seize this moment. Sadly, they are instead largely sitting on the sidelines.

The sluggish activity at the Patient-Centered Outcomes Research Institute provides a vivid illustration. It is simply not possible to make health care more efficient without knowing how treatments stack up against one another. So-called comparative effectiveness research is needed to find out, for example, whether spinal fusion surgery works better than the alternatives in relieving back pain, or whether proton beam therapy is worth the extra cost to treat prostate cancer.

Although the National Institutes of Health and private companies conduct research on whether new drugs, devices and surgical interventions are safe and effective, they perform few if any assessments of whether a product is more effective than existing alternatives. Nor is the Food and Drug Administration required to evaluate that question. Yet what patients and doctors want to know is how well different approaches work in comparison to one another, not whether each is better than nothing.

Such questions are what the Patient-Centered Outcomes Research Institute -- created under the 2010 health-care-reform law -- was meant to address. Apparently, though, the institute is falling down on the job.

So far, only 37 percent of the institute’s research funding has gone to comparing two or more treatments (including usual care or the option of doing nothing), according to a new report by Neera Tanden, Ezekiel Emanuel, Topher Spiro, Emily Oshima Lee and Thomas Huelskoetter of the Center for American Progress. A full 25 percent of the budget has been dedicated to “communications tools and education initiatives.” Communication and education are important, but right now the crucial objective should be generating the raw information to be communicated.

The institute’s work, furthermore, is cut out for it, because the Institute of Medicine has already identified the top 25 topics that should be assessed. Unfortunately, out of the 284 studies the Patient-Centered Outcomes Research Institute has funded to date, only 34 (or 12 percent) address these priority topics.

The Center for American Progress study wisely urges PCORI to increase the share of high-impact comparative effectiveness research from 37 percent to at least 80 percent by 2016, giving priority to the areas identified by the Institute of Medicine.

PCORI may be moving cautiously because comparative effectiveness research has proved to be surprisingly controversial. Some conservatives charge that it facilitates “death panels” that would deny Americans access to certain treatments. I have always found this line of attack bizarre: Conservatives favor consumer-driven approaches to health care, but how are consumers supposed to decide what treatments are worth the cost if this type of research isn’t done?

Would private health-care companies do it? They have little incentive to, because the benefits would be spread widely across the population, and it would be difficult to charge fees for access to it.

A more compelling critique is that comparative effectiveness research can easily be done in such a manner as to ignore the way medical treatments can have different effects on different subsets of people. But that is no excuse to avoid the studies altogether. It is instead a caution that such research should be done carefully, taking disparate populations into account.

President Barack Obama’s advisers have indicated that the administration, aware that action is unlikely in our polarized Congress, will focus on progress that can be directed by the executive branch alone. In health care, much can be done without new legislation. The president could start by putting the Patient-Centered Outcomes Research Institute, which is an independent organization but presumably responsive to the bully pulpit, back on track.

(Peter Orszag is vice chairman of corporate and investment banking and chairman of the financial strategy and solutions group at Citigroup Inc. and a former director of the Office of Management and Budget in the Obama administration.)

To contact the writer of this article: Peter Orszag at orszagbloomberg@gmail.com.

To contact the editor responsible for this article: Mary Duenwald at mduenwald@bloomberg.net.