Insurance Coverage for Experimental Technologies

Prologue: As health care costs continue their upward spiral, insurers attempt to rein in the amounts they cover. One way of doing this is to cut spending for procedures, devices, and drugs that are considered “experimental.” In this paper the authors argue that had insurers, including Medicare, not paid the costs associated with “unproven” technologies in the past, many of the innovations for which American medicine is lauded might not have come to pass. Insurers' reluctance to foot the bill could curtail the development of new technologies and threaten our health care system's ability to keep up the pace of helpful innovations. This paper contains a specific policy proposal for all stakeholders—payers, providers, government, and patients—to bear some responsibility to ensure that this does not occur. Earl Steinberg is vice-president of Health Technology Associates in Washington, D.C., and is codirector of its Outcomes Studies Group. He is a professor of medicine at the Johns Hopkins School of Medicine and holds a joint faculty appointment in the Department of Health Policy and Management, Johns Hopkins School of Hygiene and Public Health. He received his medical degree and a master of public policy degree from Harvard. Sean Tunis was director of the health program at the congressional Office of Technology Assessment (OTA) until that agency was closed at the end of September 1995. He joined the staff of OTA in 1992. Tunis holds a medical degree and a master's degree in health services research from Stanford University. David Shapiro is a senior analyst at the Physician Payment Review Commission. He also is an attending physician at San Francisco General Hospital and assistant clinical professor of medicine at the University of California, San Francisco. He holds a medical degree from the University of California, Los Angeles, and a law degree from Yale University. Abstract: As the number and cost of new technologies grow, it is increasingly important that we develop sound policies for payment for those technologies while their clinical impacts are being defined. Such policies need to balance social interests in promotion of innovation, early access to promising technology, patient safety, control of health care costs, and return on investment. We present a rationale, policy options, and a proposal for insurance coverage of experimental technology.