Medicare's use of cost-effectiveness analysis for prevention (but not for treatment)

Medicare currently pays for 23 preventive services in its benefits package, the majority of which were added since 2005. In the past decade, the program has transformed from one essentially administering treatment claims, to one increasingly focused on health promotion and maintenance. What is largely unappreciated is the role cost-effectiveness analysis has played in the coverage of preventive services.

We review the role of cost-effectiveness analysis in Medicare coverage of preventive services and contrast it to the lack of such consideration in the coverage of treatments.

While not considered for coverage of treatment, cost-effectiveness analysis played a role in the coverage of nine preventive services, and was evaluated in a number of instances when the service was not added. Pneumococcal vaccine, the first preventive service added to the benefit (1981), followed a Congressionally requested cost-effectiveness analysis, which showed it to be cost-saving. More recently, the Centers for Medicare and Medicaid Services (CMS) reviewed cost-effectiveness evidence when covering preventive services such as HIV screening (2010) and screening and behavioral counseling for alcohol misuse (2011) (studies reported cost-effectiveness ratios of $55,440 per QALY, and $1755 per QALY, respectively).

Cost-effectiveness analysis has played a longstanding role in informing the addition of preventive services to Medicare. It offers Medicare officials information they can use to help ensure health gains are achieved at reasonable cost. However, limiting cost-effectiveness evidence to prevention and not treatment is inconsistent and potentially inefficient.