Medical Device Daily Washington Editor

Mark McClellan, MD, has perhaps a unique place in modern healthcare economics and the rough waters of healthcare policy.

In 2002 he was named FDA commissioner, his nomination approved by unanimous consent, one of the few times in the past 10 years that any candidate has managed to avoid the controversy that surrounded other nominations. (The nomination of Andrew von Eschenbach, MD, to head the FDA, was accompanied by controversy stirred by Senate Democrats and Republicans alike.)

A mere two years later, in 2004, McClellan took the post of CMS administrator, again by a unanimous vote of the Senate. He then left that post in 2006.

In making his various moves, McClellan has straddled party affiliations and “left” and “right” definitions.

In 1998-99, he was the Deputy Assistant Secretary of the Treasury for economic policy, also serving as an associate professor of economics and an associate professor of medicine at Stanford University Medical School (Stanford, California).

After leaving CMS in 2006, McClellan took a position at the American Enterprise Institute (Washington), a conservative think tank, as a visiting scholar. McClellan then jumped the conservative/liberal divide once again, taking the job of founding director of the Engleberg Center for Healthcare Reform, a DC think tank operated by the Brookings Institution (Washington), generally regarded as a think tank on the liberal side.

Medical Device Daily caught up with McClellan via phone recently, asking a series of questions about healthcare economics.

MDD: Do you believe that Congress should enable CMS to tie reimbursement decisions to adherence to data from comparative effectiveness studies?

McClellan said: “Better evidence is clearly going to get us to better value,” but he also noted that such a development “can cut both ways” by boosting costs in the short run, even if they reduce costs over the longer term.

“I’m a big supporter of evidence, but we must be clear on what we want to know,” he said. Such efforts “do not necessarily have to focus on big effects” on overall healthcare spending, but might be better geared toward patient-specific effects.

The big returns, he said, would come after a number of such studies begin to accumulate on healthcare.

MDD: By some accounts, a handful of diseases generate the vast majority of healthcare payments, and unhealthy lifestyles, along with patient non-compliance with drug regimens, and are seen by some observers as a big driver of increasing costs, if not the primary driver of costs. Is this an area ripe for federal intervention via a public information campaign, a la tobacco?

“Public information campaigns can help,” McClellan said, but that such efforts alone would not likely make a substantial difference.

“We know ways to get compliance up,” for treatments and drug therapy, he said, such as paying providers to play a more active role in reminding patients to stay on their medications, but that a more effective approach might require “more of a focus on reimbursement reform” to bring providers along in the effort.

MDD: In the face of age-related morbidity, which is not a disease per se, is the demand for healthcare essentially inexhaustible?

“New and better ways to treat healthcare problems certainly have spurred some such demand,” McClellan said, and “innovation [in drugs and devices] has not always been used effectively.”

Despite the seemingly bottomless thirst for medical therapies to deal with any state of affairs that is less than full, robust health; thus, he said, “restricting access is not the solution.”

MDD: Some health plans have been ejected from Medicare for a variety of reasons. Given the regional variation in resource use on the part of doctors under Medicare Part B, is there a case to be made for Congress to allow CMS to kick doctors out of Medicare for persistent overuse of resources?

McClellan’s response: “I think the problem is controlling for co-morbidities... . Doctors are overwhelmed today” with continuing medical education, changing compliance requirements by payers and a host of other factors.

“If we had better measures of quality and a broader base of healthcare information technology,” he said, payers could more accurately discern which doctors really are abusing resources, and payment policy could be used to offer both carrot and stick to modify their practices.

McClellan also mentioned the Physician’s Group Practice demonstration project that CMS rolled out in 2005, essentially a pay-for-performance program for group practices.

The three-year project involves 10 physician practices, including the Dartmouth-Hitchcock Clinic (Lebanon, New Hampshire) and the University of Michigan Faculty Group Practice (Ann Arbor). However, the most recent statement from CMS on the project, dated July 11, mentions compliance with measures, but offers no specific numbers on savings.

MDD: Healthcare information technology (HIT) is often touted as an essential ingredient in transforming medical practice, but it is difficult to see how all practices are going to make the switch, given the up-front cost. How much penetration into medical practice can HIT obtain without a substantial turnover in the current crop of physician practices?

“Certainly a lot of older doctors have concluded at this stage of their careers that it is not worth the investment” to computerize their practices, McClellan said, but he reiterated that reimbursement is a key factor in making inroads on the current supply of medical practices.

However, many medical practices that are interested in such a move but cannot afford it are leery of running afoul of Stark and anti-kickback laws, despite a change to the relevant regulations on the part of the Department of Health and Human Services.

MDD: By some accounts, many hospitals and physician practices intend to sit on the sidelines until Congress rewrites the underlying statutory authority before they will share resources to bring physician practices into the Electronic Age (Medical Device Daily, August 3, 2006). Is this a problem?

“There is no question that this is an issue,” McClellan said, for hospitals and doctor’s offices and that any statutory change “certainly will help.”

However, despite recent HIT bills floating around on Capitol Hill the past two legislative sessions, he said, “I’m not sure that will be resolved [in Congress] any time soon.”