When Modern Healthcare magazine came out with its list of the "100 Most Powerful People in Healthcare" earlier this year, Barry Straube was No. 8, behind President Barack Obama at No. 1 but just ahead of White House budget chief Peter Orszag.Barry who?
Dr. Straube, a kidney specialist and a former insurance executive, is Medicare's point man on which drugs, devices and medical procedures the $400 billion-plus program will cover. He might not have the president's ear like Mr. Orszag, but as Medicare's top medical official, he has a big influence over health-care spending -- and the fortunes of health-care companies.
Under health-care legislation taking final shape in Congress, many lawmakers and the Obama administration want Medicare -- the nation's biggest purchaser of health care -- to more closely tie payments to the quality of care.
That is likely to mean more work for Dr. Straube and his staff within the Centers for Medicare and Medicaid Services, the Department of Health and Human Services agency that oversees Medicare and Medicaid. Before joining CMS in 2000, Dr. Straube had worked as chief of nephrology at the California Pacific Medical Center in San Francisco and later as vice president for quality improvement at a major insurer, Health Net Inc.
In deciding what treatments Michigan Medicare will cover, Dr. Straube's office looks at what is considered "reasonable and necessary" for beneficiaries. It is up to Dr. Straube and his staff to interpret that phrase in federal law because Congress never spelled out what it meant and industry groups don't agree on a definition.
Dr. Straube said his unit takes pains to make sure its decisions are based on scientific evidence and include public comments. The agency isn't allowed to deny treatments based on cost, and it doesn't appear likely Congress will allow that in the health-overhaul legislation. In at least one recent case, Medicare officials said they considered cost as a factor in their decision, though they said cost didn't have a big impact on the outcome.
But Dr. Straube, 60 years old, said it would make sense to consider the cost of treatment. "Given the rapidly rising cost of health care and the effects on our health care as we already see, this country will have to deal with cost one way or another," he said in an interview.
Drug and device makers are opposed to weighing cost as a factor in coverage decisions. "I think there are far better alternatives for CMS to look at" to reduce costs, such as basing payments on quality of care, not volume, and rewarding health-care providers for coordinating care, said Randy Burkholder, associate vice president for policy at the Pharmaceutical Research and Manufacturers of America, the drug-industry trade group.
As part of the evaluation process, Dr. Straube's office includes research that compares medical treatments. He said he often seeks input from the Agency for Healthcare Research and Quality, one of the federal agencies that conduct such research. Dr. Straube said he hopes to get more help from comparative research being funded with $1.1 billion from the economic-stimulus package.
Comparative research also could increase under the health-overhaul legislation. The version of the bill passed by the Senate Finance Committee would set up an independent institute to study the effectiveness of drugs, medical devices and other treatments, and CMS could use that research to help determine coverage. The provision is expected to be in the bill headed to the Senate floor.
PhRMA and the trade group representing medical-device companies support the plan for the independent institute. That step, they say, could help patients and doctors make medical decisions.
Dr. Straube's group touched off an uproar earlier this year with a decision that Medicare wouldn't pay for so-called virtual colonoscopies, which use medical imaging -- instead of inserting a tube into the colon -- to look for signs of abnormal growths. It cited insufficient scientific evidence that the procedure would benefit "average-risk Medicare beneficiaries."
Supporters, including oncologists and medical-imaging companies such as General Electric Co. and Siemens AG, say the less-invasive procedure saves lives. But some physician groups say the technique isn't cost effective -- a point Dr. Straube's group used in its decision-making, though it stated that "cost and cost effectiveness didn't greatly influence this decision."
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