, Volume 47, Supplement 1, pp S173–S190 | Cite as

The potential impact of comparative effectiveness research on U.S. Health Care expenditures

  • Daniella J. Perlroth
  • Dana P. Goldman
  • Alan M. Garber


Comparative effectiveness research (CER) has the potential to slow health care spending growth by focusing resources on health interventions that provide the most value. In this article, we discuss issues surrounding CER and its implementation and apply these methods to a salient clinical example: treatment of prostate cancer. Physicians have several options for treating patients recently diagnosed with localized disease, including removal of the prostate (radical prostatectomy), treatment with radioactive seeds (brachytherapy), radiation therapy (IMRT), or—if none of these are pursued—active surveillance. Using a commercial health insurance claims database and after adjustment for comorbid conditions, we estimate that the additional cost of treatment with radical prostatectomy is $7,300, while other alternatives are more expensive—$19,000 for brachytherapy and $46,900 for IMRT. However, a review of the clinical literature uncovers no evidence that justifies the use of these more expensive approaches. These results imply that if patient management strategies were shifted to those supported by CER-based criteria, an estimated $1.7 to $3.0 billion (2009 present value) could be saved each year.


Prostate Cancer Radical Prostatectomy External Beam Radiation Therapy Health Expenditure Active Surveillance 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Agency for Healthcare Research and Quality. 2009. “EPC Evidence Reports.” U.S. Department of Health and Human Services, Washington, DC.Google Scholar
  2. American Cancer Society. 2009. “Cancer Facts & Figures 2009.” Atlanta, GA: American Cancer Society.Google Scholar
  3. Bill-Axelson, A., L. Holmberg, M. Ruutu, M. Haggman, S.O. Andersson, S. Bratell, A. Spangberg, C. Busch, S. Nordling, H. Garmo, J. Palmgren, H.O. Adami, B.J. Norlen, and J.E. Johansson. 2005. “Radical Prostatectomy Versus Watchful Waiting in Early Prostate Cancer.”New England Journal of Medicine 352: 1977–84.CrossRefGoogle Scholar
  4. Charlson, M.E., P. Pompei, K.L. Ales, and C.R. MacKenzie. 1987. “A New Method of Classifying Prognostic Comorbidity in Longitudinal Studies: Development and Validation.”Journal of Chronic Diseases 40: 373–83.CrossRefGoogle Scholar
  5. Congressional Budget Office (CBO). 2007a. “The Long-Term Outlook for Health Care Spending.” Publication No. 3085. CBO, Washington, DC.Google Scholar
  6. —. 2007b. “Research on the Comparative Effectiveness of Medical Treatments: Issues and Options for an Expanded Federal Role.” Publication No. 2975. CBO, Washington, DC.Google Scholar
  7. Cutler, D.M. and M. McClellan. 2001. “Is Technological Change in Medicine Worth It?”Health Affairs 20(5): 11–29.CrossRefGoogle Scholar
  8. Cutler, D.M., A.B. Rosen, and S. Vijan. 2006. “The Value of Medical Spending in the United States, 1960–2000.”New England Journal of Medicine 355: 920–27.CrossRefGoogle Scholar
  9. Executive Office of the President, Council of Economic Advisors. 2009. “The Economic Case for Health Care Reform.” June 2009. Available online at Scholar
  10. Garber, A.M. and D.O. Meltzer. 2009. “Setting Priorities for Comparative Effectiveness Research.” Pp. 15–33in Implementing Comparative Effectiveness Research: Priorities, Methods, and Impact. Washington, DC: Brookings Institution.Google Scholar
  11. Geithner, T.F. 2009. “2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund.” Available online at Scholar
  12. Ghali, W.A., R.E. Hall, A.K. Rosen, A.S. Ash, and M.A. Moskowitz. 1996. “Searching for an Improved Clinical Comorbidity Index for Use With ICD-9-CM Administrative Data.”Journal of Clinical Epidemiology 49: 273–78.CrossRefGoogle Scholar
  13. Goldman, D.P., G.F. Joyce, J.J. Escarce, J.E. Pace, M.D. Solomon, M. Laouri, P.B. Landsman, and S.M. Teutsch. 2004. “Pharmacy Benefits and the Use of Drugs by the Chronically Ill.”Journal of the American Medical Association 291: 2344–50.CrossRefGoogle Scholar
  14. Goldman, D.P., G.F. Joyce, and P. Karaca-Mandic. 2006. “Varying Pharmacy Benefits With Clinical Status: The Case of Cholesterol-Lowering Therapy.”American Journal of Managed Care 12(1): 21–28.Google Scholar
  15. Goldman, D.P., B. Shang, J. Bhattacharya, A.M. Garber, M. Hurd, G.F. Joyce, D.N. Lakdawalla, C. Panis, and P.G. Shekelle. 2005. “Consequences of Health Trends and Medical Innovation for the Future Elderly.”Health Affairs 24(Suppl. 2): W5R5–17.Google Scholar
  16. Hoffman, R.M., W.C. Hunt, F.D. Gilliland, R.A. Stephenson, and A.L. Potosky. 2003. “Patient Satisfaction With Treatment Decisions for Clinically Localized Prostate Carcinoma. Results From the Prostate Cancer Outcomes Study.”Cancer 97: 1653–62.CrossRefGoogle Scholar
  17. Institute of Medicine. 2009. “Initial National Priorities for Comparative Effectiveness Research.” Washington, DC: The National Academies Press.Google Scholar
  18. Iversen, P., P.O. Madsen, and D.K. Corle. 1995. “Radical Prostatectomy Versus Expectant Treatment for Early Carcinoma of the Prostate. Twenty-three year follow-up of a prospective randomized study.”Scandinavian Journal of Urology and Nephrology Supplement 128: 502–504.Google Scholar
  19. Joyce, G.F., J.J. Escarce, M.D. Solomon, and D.P. Goldman. 2002. “Employer Drug Benefit Plans and Spending on Prescription Drugs.”Journal of the American Medical Association 288: 1733–39.CrossRefGoogle Scholar
  20. Joyce, G.F., D.P. Goldman, P. Karaca-Mandic, and G.D. Lawless. 2008. “Impact of Specialty Drugs on the Use of Other Medical Services.”American Journal of Managed Care 14: 821–28.Google Scholar
  21. Joyce, G.F., D.P. Goldman, P. Karaca-Mandic, and Y. Zheng. 2007. “Pharmacy Benefit Caps and the Chronically Ill.”Health Affairs 26: 1333–44.CrossRefGoogle Scholar
  22. McClellan, M., B.J. McNeil, and J.P. Newhouse. 1994. “Does More Intensive Treatment of Acute Myocardial Infarction in the Elderly Reduce Mortality? Analysis Using Instrumental Variables.”Journal of the American Medical Association 272: 859–66.CrossRefGoogle Scholar
  23. Murphy, K.M. and R.H. Topel. 2006. “The Value of Health and Longevity.”Journal of Political Economy 114: 871–904.CrossRefGoogle Scholar
  24. National Aeronautics and Space Administration (NASA). n.d. “Gross Domestic Product: Deflator Inflation Calculator.” Washington, DC: NASA.Google Scholar
  25. National Cancer Institute. 2008a. “Surveillance and Epidemiology End Results Stat Fact Sheets.” U.S. National Institutes of Health, Bethesda, MD.Google Scholar
  26. —. 2008b. “Surveillance, Epidemiology, and End Results (SEER) Program SEER*Stat Database: Incidence—SEER 17 Regs Limited-Use + Hurricane Katrina Impacted Louisiana Cases, Nov 2007 Sub (1973–2005 varying)—Linked To County Attributes—Total U.S., 1969–2005.” Division of Cancer Control and Population Sciences, Surveillance Research Program, Cancer Statistics Branch, Bethesda, MD.Google Scholar
  27. Newhouse, J.P. 1992. “Medical Care Costs: How Much Welfare Loss?”Journal of Economic Perspectives 6(3): 3–21.Google Scholar
  28. Paulson, D.F., G.H. Lin, W. Hinshaw, and S. Stephani. 1982. “Radical Surgery Versus Radiotherapy for Adenocarcinoma of the Prostate.”Journal of Urology 128: 502–504.Google Scholar
  29. Rosenbaum, P.R. and D.B. Rubin. 1984. “Reducing Bias in Observational Studies Using Subclassification on the Propensity Score.”Journal of the American Statistical Association 79: 516–24.CrossRefGoogle Scholar
  30. Schoen, C., S. Guterman, A. Shih, J. Lau, S. Kasimow, A. Gauthier, and K. Davis. 2007. “Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending.” Report. The Commonwealth Fund, New York.Google Scholar
  31. Shappley, W.V., III, S.A. Kenfield, J.L. Kasperzyk, W. Qiu, M.J. Stampfer, M.G. Sanda, and J.M. Chan. 2009. “Prospective Study of Determinants and Outcomes of Deferred Treatment or Watchful Waiting Among Men With Prostate Cancer in a Nationwide Cohort.”Journal of Clinical Oncology 27: 4980–85.CrossRefGoogle Scholar
  32. Warren, J.L., K.R. Yabroff, A. Meekins, M. Topor, E.B. Lamont, and M.L. Brown. 2008. “Evaluation of Trends in the Cost of Initial Cancer Treatment.”Journal of the National Cancer Institute 100: 888–97.CrossRefGoogle Scholar
  33. Wilt, T.J., R. MacDonald, I. Rutks, T.A. Shamliyan, B.C. Taylor, and R.L. Kane. 2008. “Systematic Review: Comparative Effectiveness and Harms of Treatments for Clinically Localized Prostate Cancer.”Annals of Internal Medicine 148: 435–48.Google Scholar

Copyright information

© Population Association of America 2010

Authors and Affiliations

  • Daniella J. Perlroth
    • 1
  • Dana P. Goldman
    • 2
    • 3
  • Alan M. Garber
    • 1
    • 4
  1. 1.Stanford Health PolicyStanford UniversityStanford
  2. 2.University of Southern CaliforniaLos Angeles
  3. 3.RAND CorporationSanta Monica
  4. 4.Veterans Affairs Palo Alto Health Care SystemPalo Alto

Personalised recommendations