Evidence-Based Medicine,
Cost-Effectiveness and Medi-Cal Redesign

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Submitted by Laura Remson Mitchell
on behalf of the
California Disability Alliance
and the
California Work Group on Work Incentives and Health Care

Two concepts that have gained increasing popularity in health policy discussions of late are "evidence-based medicine" and "cost-effectiveness." Both have been mentioned with regard to Medi-Cal Redesign. For this reason, we feel we must comment.

If properly applied, both evidence-based medicine and cost-effectiveness have the potential to improve the quality of health care provided to Medi-Cal beneficiaries and, over time, to reduce costs, thereby allowing more people to be served. Unfortunately, however, these terms are most frequently mentioned in connection with reforms that are intended first and foremost to reduce health costs, not to improve care. Though it may not be stated specifically, it seems clear from the timing of Medi-Cal Redesign during a serious budget crisis-and from the Governor's stated objectives-that the driving force behind redesign is fiscal.

I will address these two concepts one at a time.

Evidence-Based Medicine

While it's certainly desirable for health-care programs, including Medi-Cal, to follow treatment guidelines that are based on the latest research and best clinical practices, the evidence considered in "evidence-based medicine" can comprise a number of very different things. Each of those possibilities can result in a different set of guidelines.

The ultimate evidence would be health outcomes. For people with disabilities, those outcomes need to be determined based not just on medical results but also on the patient's judgment of how the health intervention has affected his or her life. For example, has the health item or service improved or maintained the patient's functional independence and autonomy (or slowed losses that would reduce such independence and autonomy)? Most discussions of "evidence-based medicine," however, tend to focus on scientific clinical studies, especially double-blind studies. There are several problems with this standard, including, but not limited to, the following:
  1. Available clinical studies may have been done on patient populations with different demographics and different co-morbidities than the particular patient being seen by the Medi-Cal provider. How would such studies be applied in a clinical setting? Would the results of a study on young, healthy, white males be applied to treatment of a 65-year-old Latina woman with post-polio syndrome and heart problems? Would the absence of an approved study specifically on people who share the patient's demographic and medical profile mean that only the standard (or least-expensive) treatment would be covered-even if that treatment might be ineffective or harmful for the patient?
  2. For many conditions, there are no clinical studies at all. That's especially true for relatively rare or newly identified conditions and for those affecting relatively small populations, particularly those without much political or economic power. Will the absence of studies translate into the absence of appropriate treatment for these conditions and populations-even when there is a treatment that has a record of success based on the clinical experience of the physician and/or as reported in medical literature? If so, the system will be discriminating against many of the very people Medi-Cal is intended to serve-including people with disabilities.
  3. Results of various studies can and often do conflict. If "scientific evidence" is used as a basis for covering or not covering various treatments, the people who select the studies to review for that "evidence" will have tremendous power over the health-care options of Medi-Cal beneficiaries. How will the reviewers be selected? What kind of oversight will there be to assure that there is no bias (intentional or unintentional) in the selection of the studies used for developing "evidence-based" guidelines? How often will the "evidence" be updated or re-evaluated? Long time lags could deprive Medi-Cal beneficiaries of the most effective treatments for their health needs not because the evidence doesn't exist but rather because the state hasn't been keeping up. As long as the research is for the purpose of informing physicians-not for directing or restricting their treatment options-the system can be self-correcting and can lead to better health care. But if "evidence-based medicine" means using these guidelines as a kind of one-size-fits-all treatment grid, it will lead to poor health outcomes and potentially greater costs.
  4. Unfortunately, it is often the availability of funding, rather than the need for research data, that determines what gets studied. Thus conditions that haven't attracted the attention of drug companies or foundations or condition-specific organizations that fund research projects are less likely to have been studied. Furthermore, in many cases, the funder of a study decides the question to be investigated. And the way the question is posed can affect the study outcome. Again, if Medi-Cal begins to rely on "evidence-based medicine," how will it assure that biases-conscious or unconscious-aren't built into the studies that are used as "evidence"?
  5. We recognize that scientific evidence can be valuable in developing treatment guidelines. However, those guidelines must be voluntary, allowing physicians and other health-care providers to work in partnership with their patient to find the most appropriate treatment. Mandatory "guidelines" would be extremely dangerous for people with disabilities, serious chronic health problems, and rare diseases, as well as for members of many racial and ethnic minority groups.

Oregon's approach to Medicaid cost-containment.

The Oregon approach to Medicaid cost-containment has been positively cited several times in regard to Medi-Cal Redesign. And, in fact, California does have much to learn from the experience of Oregon-and from the experience of other states as well. However, we see some significant problems. For example:

The NMHA Issue Brief challenges the Drug Effectiveness Review Project process on several grounds, including a lack of meaningful public input. It also points out that the Center for Evidence-based Policy has been approaching state Medicaid directors and offering, for $100,000, to provide access to the center's data. If this is to be the basis for Medi-Cal's Preferred Drug List and/or for any system of limiting access to prescription drugs or other health services based on "scientific evidence," how will Medi-Cal protect beneficiaries for whose conditions there is little, if any, scientific research? If the data that is provided amounts to some kind of ranking that reflects aggregated data only, how would physicians-or Medi-Cal administrators-even know the details of the individual studies that were reviewed? Such study-specific information might be critically important to determining the appropriateness of therapy alternatives for patients with complex or multiple health problems.

If "evidence-based" guidelines are to be developed, we believe that people with disabilities and chronic illnesses should play a major role in evaluating the effectiveness of treatments for beneficiaries with disabilities and creating those guidelines. After all, we are the people who must live with the health outcomes.

Scientific evidence can be valuable if it is used-along with information on best practices, outcomes research, and clinical experience-t to inform physicians about treatment options. But cost considerations must be carefully separated from a review of scientific data to protect the reliability of the research. If not, "evidence-based medicine" is likely to become not a guideline but rather a straitjacket and an excuse for denying care that is medically necessary and appropriate. This is something we strongly oppose.


Like "evidence-based medicine," the concept of "cost-effectiveness" can have either positive or negative impact on health care for Medi-Cal beneficiaries. The key issue here is how "cost-effectiveness" is viewed. The cost-effectiveness of a treatment can be evaluated:

On the basis of the total Medi-Cal population.
This would be an appropriate way to determine an initial treatment choice for most conditions for most Medi-Cal beneficiaries.
On the basis of a sub-set of that population.
This would be appropriate for determining the initial treatment choice for most people with a given condition with given demographic characteristics.
On the basis of the individual patient.
This would evaluate treatment options in the context of the patient's specific characteristics, including but not limited to age, gender, ethnicity and co-existing health problems. This type of cost-effectiveness must be ultimate determining factor in selecting the treatment option.

All three of these approaches have their place, but the danger-especially for people with disabilities and complex or multiple chronic illnesses-is that the desire to contain costs will emphasize only what appears to be cost-effective for the entire Medi-Cal population (or perhaps for the sub-set of that population with a health problem that has recognized treatment guidelines that work for most such patients). The result can be not only denial of necessary care but also use of inappropriate and potentially harmful treatments.

To the extent that such inappropriate or harmful treatments result in secondary or tertiary health problems or disabilities, the assumed cost-effectiveness for the total population may turn out to be illusory. In effect, the failure to look at cost-effectiveness in terms of what is cost-effective in the individual patient's case, not just what appears to be cost-effective for the group overall, may well wind up costing the Medi-Cal program-and the state-more, not less, in the long run.

As with evidence-based medicine, the danger here is that instead of being used as a guideline-a way to keep costs down when it doesn't harm patient care-the concept will be applied indiscriminately, with no regard to individual patient differences.

Good medical practice and good health outcomes depend not only on the use of reliable evidence-based guidelines but also on a team approach to care in which physician and patient work together as partners to determine the best treatment choice. While it is reasonable for the system to promote the use of the least-expensive treatment that will provide the desired health-outcome with the least harmful side effects, it is not acceptable for cost to be the driving factor in treatment decisions nor for cost considerations alone to exclude a legitimate treatment option that the doctor believes is medically necessary and more appropriate for a particular patient than treatments on some formulary (whether for drugs or for other treatments).


Efficient use of health-care resources cannot be achieved by looking only at what appears to be cost-effective for the total Medi-Cal population or for the average patient or even for the average patient with a particular health condition. It requires the flexibility to provide timely treatment that is cost-effective for the individual patient.

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