path. Biomedical science may contribute only a portion of the knowledge and research that is needed to develop an idea or technology fully. Even after the technology is in use, the obstacles to defining and measuring the costs, effectiveness, and outcomes are many. Distributional and equity issues present themselves at many points along the R&D process. These methodological problems have yet to be solved. The list could be continued, but the heart of the issue is that formal CEA/CBA is not readily useful or applicable to the process of planning, allocating, or evaluating biomedical research.

The case against CEA and CBA grows even stronger when one examines the mechanisms already in place to assist the biomedical R&D decisionmaking process. Those mechanisms, the peer review system and evaluation processes, seem to have performed adequately over the years to allocate research resources efficiently and intelligently. As the rough edges are removed from those systems, they become even more valuable to the decisionmaking process. At the level of biomedical R&D, a cost-effectiveness attitude probably serves the system better than would formal CEA/CBA.

In 1978, Congress added a new level of evaluation and coordination to the health care research, development, and application process by establishing NCHCT as part of HEW." NCHCT is responsible to the Assistant Secretary of Health, DHHS. Its mandate is to "undertake and support assessments of health care technologies.'

Before the creation of NCHCT, there was no identifiable organization that could act as a coordinator for information concerning emerging technologies. There was no single office that had the responsibility to act as the information manager for the application and dissemination of new medical technologies."

NCHCT has a potentially important role in the decisionmaking process. Its enabling legislation establishes a number of broad-ranging functions for NCHCT. Generally, NCHCT is to set priorities for technology assessment and to encourage, conduct, and support assessments, research, demonstrations, and evaluations concerning health care technology. Specifically, the Center will (437):

"The statute establishing NCHCT is Public Law 95-623, sec. 309 of the Health Services Research, Health Statistics, and Health Care Technology Act, Nov. 9, 1978.

'With respect to new medical technologies, the responsibility and involvement of NIH tends not to extend much past the applied research and early transfer stages. The health services research sector usually does not focus on new technologies until they are in place or at least well along the development cycle.

• undertake and support comprehensive assessments of health care technology, including analyses of safety and efficacy, and ethical issues;

• undertake and support studies of the cost effectiveness and cost/benefit of current and developing technologies;

• undertake and support syntheses of existing research (e.g., state-of-the-art papers);

• provide the best scientific/medical and economic assessments to HCFA on medicare coverage for specific medical procedures and technologies, including evaluation of the costs and benefits of old procedures and assessment of new technologies for which HCFA might require medicare coverage decisions in the future;

• undertake and support dissemination of information derived from its assessment activities to the practicing and scientific communities, Federal agencies with health interests, third-party payers, the public, and others as appropriate;

⚫ undertake and support manpower training programs to provide for an expanded and continuing supply of individuals qualified to perform the research, demonstration, and evaluation activities related to health care technology; and

undertake and support, to the extent practicable, by September 1, 1981, the planning, establishment, and operation of three extramural centers for assessments, re

search, demonstrations, and evaluations of issues in health.

By law, NCHCT must have a national council to advise the NCHCT staff. A major function the council, which has been established, will serve is the identification and selection of medical technologies that should receive priority attention. 10 The council is also asked to (142):

• advise the Secretary on the safety, efficacy, effectiveness, cost effectiveness, and social, ethical, and economic implications of particular health care technologies;

• develop, publish, and disseminate standards, norms, and criteria concerning the use of particular technologies, when appropriate and practicable; and

• review applications for grants and contracts exceeding $35,000 in direct costs.

NCHCT is less than 2 years old. Much of its activity since its creation has been directed towards organizing and developing procedures to perform the functions it was created to serve. For that reason, it is difficult to examine NCHCT in the same light as NIH, NCHSR, and HCFA-agencies that, together, have several decades of experience behind them.

Research Support Structure

The research support structure of NCHCT is similar to that of NIH, NCHSR, and HCFA. NCHCT will support research via extramural grants, extramural contracts, intramural research, and will support manpower training programs to draw qualified individuals into this area of research. The national council is responsible for reviewing any grant exceeeding $35,000 in direct costs, and outside experts can be used to review and provide comment on any applications for research funds or any results of research that are received by NCHCT. The peer review system and the basic organizational pro

10 The NCHCT National Council identified the following technologies as candidates for priority consideration (457):

Ultrasonic diagnostic procedures; coronary by-pass surgery; fetal monitoring; end-stage renal disease-dialysis (home v. hosp.), transplantation, etc.; non-invasive radioactive imaging; barium enema; EEG; nuclear magnetic resonance; auto-analyzers; all skull films; cerebral angiography; dental X-rays; CAT scanner; continuous flow analysis.

cedures for selecting and supporting research at NCHCT are much the same as elsewhere.

Technology Evaluation Activities

NCHCT is in the process of pursuing a range of research and dissemination activities and is in the planning stages for several additional projects to be initiated this year (1980). At the first national council meeting in October of 1979, Ruth Hanft, Acting Deputy Assistant Secretary for Health Research, Statistics, and Technology, reviewed a number of the activities that are ongoing or in the planning stages at the Center. These activities are (142):

1. Comprehensive assessment.—Safety, efficacy, cost effectiveness, and economic, social, and ethical impact of a selected technology will comprise a comprehensive assessment. Two such assessments will be initiated in fiscal year 1980.11

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2. Coverage issues. -HCFA asks the Center for advice regarding the appropriateness of paying for the use of certain technologies with medicare funds. Currently, the Center is responding to 53 requests for coverage recommendations.

3. Consensus development processes of NIH. -The Center will be more involved in the consensus development conferences sponsored by NIH and will cosponsor some of these. NCHCT provided an economic analysis at the conference on intraocular lenses conducted in September 1979. 4. Intramural activities.-The Center is conducting cost-effectiveness studies on a number of technologies (e.g., intraocular lenses, estrogen use by postmenopausal women, and antenatal diagnosis).

5. Overviews.-The Center is writing stateof-the-art papers on technologies which are candidates for comprehensive assess

"In the fall of 1979, NCHCT was handed, or chose, its first technology assessment topic-the alpha fetoprotein test kits. FDA is delaying approval of this new technology that it has found to be safe and effective until the Center completes an assessment of the kit's impact on the health care system and society. NCHCT is coordinating the information, input, and efforts of FDA, the Center for Disease Control, NIH, the Health Resources Administration, HCFA, and others in order to evaluate the full range of issues involved.

ments (e.g., end-stage renal disease, electroencephalography, and coronary bypass surgery).

6. Dissemination. -This activity is just beginning, with the assistance of NIH and FDA among others. In fiscal year 1980, the Center will begin its own dissemination activities.

7. Early warning system. -HCFA, the Center for Disease Control, FDA, NIH, and the Alcohol, Drug Abuse, and Mental Health Administration are developing methodologies to identify emerging technologies. Non-Federal organizations, such as the American Hospital Association, will also help identify emerging technologies.

8. Grant and contract program. -This program began in fiscal year 1980 in the area of literature syntheses, cost-effectiveness studies, and economic, social, and ethical analyses.

9. Centers program.-Public Law 95-623 requires that three extramural research centers be established by September 1, 1981.

As this list of activities indicates, NCHCT is involved in a wide range of technology evaluation efforts. At one end of the technology evaluation process, the Center is involved in consensus development activities at NIH which are focusing on relatively new medical technologies that have areas of uncertainty to be resolved. In addition, a very important part of the Center's efforts is focused on the reimbursement system (see ch. 5). NCHCT is specifically charged with coordinating information and making recommendations to HCFA regarding new or existing medical technologies. All indications are that this will be a priority activity of the Center. Finally, the Center will provide comprehensive examinations of medical technologies that have been in use for some time. In many of its functions, NCHCT has the authority to conduct or fund CEAs.

Potential Use of CEA/CBA

NCHCT is in a position to act as an information broker to a number of agencies at a variety of decision points in the policymaking process.

Its mandate is so broad, however, that it may become overwhelmed by the number and diversity of functions it is asked to perform. Funding levels, and consequently staffing levels, are significantly lower than those called for in NCHCT's authorizing legislation. 12 This factor may significantly affect the number and range of duties the Center can be expected to perform. So far, HCFA has requested NCHCT to examine 53 coverage issues. With this area of responsibility and the other functions listed above, NCHCT will likely find it difficult, at current funding and staff levels, to totally fulfill the expectations placed on it.

NCHCT has developed a priority-setting process that may help it handle the influx of requests for information, recommendations, assessments, and general assistance. To a degree, priority-setting is vested in the national council, but the council focuses primarily on the selection of medical technologies that warrant fullscale assessments. The remainder of the priority-setting process is a mixture of identifying inhouse needs, perceptions of what areas require more immediate action, the assimilation of priority areas and views of the agencies NCHCT must work with and respond to, and the general consensus of the scientific and medical community regarding issues that require attention. In addition, NCHCT priorities will be set to a degree by the deadlines of the agencies with which NCHCT works.

The result of these many factors and considerations is an unclear picture of how formal CEA/ CBA fits into NCHCT's activities. The agency is new; it remains to be seen to what extent NCHCT will conduct or support formal CEA/ CBA. If, where, and when these techniques are employed, it will be interesting to note their level of sophistication, their use in decisionmaking efforts, and their level of input into and impact upon the policy process.

12The enabling legislation (Public Law 95-623, sec. 309) authorized $15 million, $25 million, and $35 million for fiscal years 1979 through 1981, respectively, for NCHCT to carry out its mandate. The fiscal year 1979 budget for the Center was $344,000, and the fiscal year 1980 budget is $3.25 million.

HEALTH SERVICES RESEARCH

Health services research is relatively new as an organized field of research. Only in the last two decades has there been significant Federal involvement in this field. Before Federal support, health services research efforts were sporadic and infrequent. The infusion of Federal involvement and financial support helped to organize the disparate parts into a more focused field of inquiry.

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The activities represented by the National Center for Health Statistics (see app. B) have a history going back at least to 1946 when Congress first authorized vital statistics activities. Two of the Nation's primary centers for guiding, conducting, funding, and disseminating health services research efforts-NCHSR and HCFA-are 12 and 3 years old, respectively. 13 HCFA tends to focus most of its research on its program needs. NCHSR, however, was created to conduct and support broadly based health services research that does not necessarily have to be tied to any agency's program needs. Since NCHSR's arrival on the health services research scene, several Federal organizations have been authorized to pursue, or have assumed, varying degrees of responsibility for health services research activities.14

The past decade of federally supported health services research efforts has raised numerous questions regarding the uses and usefulness of health services research, its "cost effectiveness," and its impact on the decisionmaking process. A great deal of discussion has centered on the factors and mechanisms needed to address these questions and improve health services research. Analysts who have examined many of these issues have often reached diametrically opposed

13 Although HCFA is 3 years old, the parts that comprise the Agency have existed for many years. The medicare and medicaid programs and the Office of Research and Statistics were originally located in the Social Security Administration. The PSRO program at HCFA was preceded by the Health Standards and Quality Bureau in the Office of the Assistant Secretary of Health at HEW.

14 An Institute of Medicine report identifies at least 15 Federal departments, agencies, or commissions, that conduct or fund some form of health services research. The Federal involvement ranges from that of the Federal Trade Commission to that of the National Aeronautics and Space Administration and DHHS (formerly HEW) (428).

conclusions regarding the performance of services research. One side of the debate cites numerous examples of major health policy decisions where services research was of little consequence (31,359,383,423). The other side cites evidence to support the notion that health services research has been successful in producing information useful to the policy process, in some instances has been instrumental in stimulating policy debate and change, and in general, compares favorably to other forms of social services research (139,186,428,566).15

It is doubtful whether the debate surrounding the performance and usefulness of health services research will be settled conclusively one way or the other. The range and types of issues that services research must address, the dynamic nature of the policy issues and health care system, and the complexity of the decisionmaking process combine to almost preclude a conclusion regarding the relative worth of the information produced by health services research efforts. Nevertheless, there does seem to be a general feeling that health services research has not attained the high level of expectations set for it a decade ago and that improvements can be made. The ongoing examination and evaluation of services research may help improve its focus, usefulness, and quality.

The primary focus of this section is on the current or potential use of CEA/CBA in the health services research decisionmaking process, i.e., the procedures used to establish health services research priorities, fund research projects, and evaluate work that is ongoing or that has been completed. The section also discusses the extent to which certain health services research agencies support CEA/CBAS as part of their research missions.

NCHSR and HCFA represent the Federal Government's most substantial commitment to the area of health services research. NCHSR and

15It is beyond the intent of this assessment to examine this debate. For detailed discussions of the history of services research, its contributions, its weaknesses, and its development, see the following references listed at the end of this report: 24, 36, 210, 428, and 643.

HCFA provide the highest level of funding of health services research in the United States. The funding levels for health services research have declined in actual and real terms since the peak years of the early 1970's. NCHSR's 1978 budget represented less than 40 percent of its purchasing power for research and training programs compared to the levels of the early 1970's (428). Together, NCHSR and HCFA contribute roughly 40 percent of the total amount of Federal funds allocated to health services research (428). In fiscal year 1980, they will control approximately $50 million in moneys earmarked for services research. These agencies occupy a very influential position in the health services research community and are in a position to exercise considerable influence on the content, direction, and level of health services research in this country.

It is unclear where applied biomedical research ends and where health services research begins. Several agencies that focus primarily on conducting and supporting basic and appied research routinely conduct or fund health services research as part of their programmatic missions (428).

Health services research is unlike most other areas of scientific inquiry in that it is not organized around a single discipline with unique perspectives, closely drawn areas of expertise, common methodologies or techniques, and standard nomenclatures. Health services research is a mixture of concepts, methodologies, attitudes, and professions that could easily span a large university's graduate school catalog. The field of health services research must accommodate data, methodological frameworks, disciplines, and perspectives from the diverse fields of medicine, other health-care-related disciplines (epidemiology, nursing, public health, etc.), biostatisticians, engineers, lawyers, demographers, geographers, operation researchers, economists, social workers, hospital and business administrators, and so forth. Individual health services researchers tend to approach the issues from the confines and perspective of their particular discipline.

David Mechanic describes the purpose of health services research as follows (396):

The health services research field focuses on the production, organization, distribution, and impact of services on health status, illness, and disability. . . it concentrates attention on improving the distribution, quality, effectiveness, and efficiency of medical care.

A study by the Institute of Medicine on health services research attempted to provide guidelines for the description or classification of the types of health services research that exist. According to that report, a study is classified as health services research if it satisfies two criteria (428):

1. It deals with some features of the structure, processes, or effects of personal health services.

2. At least one of the features is related to a conceptual framework other than that of contemporary applied biomedical science.

National Center for

Health Services Research

NCHSR was created in 1968 without explicit congressional authorization. It was not until 1974 that NCHSR received legislative authority via the Health Services Research, Health Statistics, and Medical Libraries Act (Public Law 93-353). Since then, several laws have added to or modified NCHSR's research domain. 16

NCHSR has two principal responsibilities. One is to develop information that might be used by various decisionmakers in the public and private sectors. The other is to ensure that the information that results from the research, evaluation, and demonstration activities of NCHSR is disseminated rapidly and in a form that is usable.

NCHSR is a major supporter of broadly focused health services research. Its fiscal year 1980 operating budget will be almost $30 million. NCHSR is almost unique in the Federal Government in that it can sponsor health services research apart from direct administrative or

16 A few of those laws are the National Health Planning and Resources Development Act of 1974 (Public Law 93-641), the Emergency Medical Services Systems Act of 1973 (Public Law 93-154, sec, 1205), and the Health Maintenance Organizations Act of 1973. These and others have influenced the direction of research priorities and level of funding from NCHSR.