The federal government has finally jumped on the IRO bandwagon with the approved $787 billion economic stimulus bill that provides substantial amounts of money for the federeal government to compare the effectiveness of different treatments for the same illness.

According to a recent New York Times article, "under the legislation, researchers will receive $1.1 billion to compare drugs, medical devices, surgery and other ways of treating specific conditions." These comparisons will likely become the touchstone for independent review organizations, payers and hospitals alike to use to establish standards of care that are based off of empirical evidence. The article states that the program is a response to a "growing concern that doctors have little or solid evidence of the value of many treatments."

Researchers also hope that the program will eventually save money by discouraging the use of costly, ineffective treatments; a vital improvement for the soaring cost of health care nationwide.

The Health and Human Services Department will have immediate access to the money, which can be spent over several years. The article reported that "some money will be used for systematic reviews of published scientific studies, and some will be used for clinical trials making head-to-head comparisons of different treatments."

In essence, the health care problem could very well be on the mend for hospitals, doctors, payers and consumers alike.

To read about political reactions, click here to view the full article: http://www.nytimes.com/2009/02/16/health/policy/16health.html?ref=health

Usually paying a premium for services and goods means you’re getting a product of higher quality in return. For example, organic produce costs more than conventionally-grown produce and octane 92 gas costs more than octane 89 but you get what you pay for: better fruits and cleaner gasoline.

According to a study conducted by Commonwealth Fund, a nonprofit research group in New York, this get-what-you-pay-for formula is not the case for the American healthcare system. The report shows that the United States spends more than twice as much on each person for health care as most other industrialized countries but has fallen to last place among those countries in preventing deaths through use of timely and effective medical care.

In summary: Americans are paying way too much for very little. The study also examines costs and inefficiencies within the American healthcare system. The administrative costs of the medical insurance systems consume much more of the current healthcare dollar, about 7.5 percent, than in other countries.

One avenue that healthcare payors can take to reduce costs is to outsource review cases to independent review organizations (IRO). IROs are efficient, cost-effective and knowledgeable, providing peer specialists who are actively practicing and up-to-date with today’s medical standards. By ensuring that reviews are done according to current medical standards, IROs reduce extraneous administrative costs of rework and re-reviewing.

Read the full article.