Diagnostics & Imaging Week Washington Editor

WASHINGTON Balancing innovation and cost-effective healthcare.

That was the message during a speech last week by Mark McClellan, MD, administrator of the Centers for Medicare & Medicaid Services (CMS; Baltimore) at the annual meeting of the American Institute for Medical and Biological Engineering.

The theme for this year's meeting was bionanotechnology, and during his speech at the National Academy of Sciences, McClellan focused on the relationship between good public policy and sound science.

"It is so important for those of us in policy to have an understanding of science," he told the morning gathering. "With cumulative advances, I believe we are going to see even more progress enabled by new sciences such as genomics and nanotechnology that will allow us for the first time to look at diseases on the smallest possible scale and design treatments that are more effective as a result."

McClellan said there is more potential as a result of current innovations in nanotechnology and other similar sciences to stop diseases and interrupt their progress than there has been before.

"Just as this kind of miniaturization transformed the field of electronics, there is no reason we shouldn't expect the same sort of process to occur in practical applications when it comes to medicine," he said.

Part of McClellan's theme was that CMS is not just a source of the healthcare funding for those in need, but that it also drives the process of innovation. He cited the recent expanded coverage decision the agency made for implantable cardioverter defibrillators.

Included in that decision was the establishment of a registry to collect post-market data concerning device recipients to gather additional data to ensure safety, as well as information for medical researchers and engineers.

"We are spending well over $500 billion at CMS this year, and what we do will have an influence on how medical technologies are developed and how they are applied throughout the healthcare system," he said. "We can work now, to focus on how Medicare and Medicaid can act as public health agencies to improve access to innovative kinds of therapies."

McClellan said there are "too many questions" to answer if limited to a pre-market setting.

Saying he envisions a healthcare system that provides "truly individualized care that is focused on specific individual needs," McClellan said that opportunity is closer, thanks to new breakthroughs in medical science.

"Most of the new medical applications that people envision from nanotechnology when it comes to medical applications are still in the exploratory stage, years away from actual use," he explained. "I have no doubt that these will come to pass, if we make the right decisions today."

Policy decisions made today, he said, directly relate to making better use of new medical innovations, in turn providing better patient care.

The key: keeping it affordable.

"This is one of our central challenges in health policy today, balancing cost and innovation," he said. "I do not think it is overstating it to say that our healthcare system is at a crossroads."

In 2005, according to McClellan, more than $100 billion will be spent in developing new medical technology, including both public and private dollars.

The cost "is the real challenge," he said.

"There are an unprecedented number of potential valuable medical innovations in development right now, and yet many of these developments have a pretty minimal impact on the delivery of medicine in our healthcare system," McClellan said. "Just now proteomic and genomics are finding their way into widely used clinical applications."

As the FDA improves its processes to make developing those treatments less uncertain, less costly, and less time consuming, innovation will find its way to patients with less cost and in less time, he said.

CMS is in the process of developing a guidance document for the agency to be released in late March that will outline its policies on combining coverage decisions with stronger support of evidence, bolstering patient safety and gathering data, according to McClellan.

"This is a tremendous opportunity for product developers. We need to be moving toward a healthcare system where we have more answers and a solid foundation of evidence in individual cases."

Stronger partnership with developers of technology is needed concerning what works best for CMS beneficiaries, McClellan said.

"It is important, given the tremendous opportunities we have in medical technology fields such as nanotechnology," he said. "While there is a lot of potential for improving our product development, we have not yet applied it, though we have made tremendous progress biomarkers and diagnostic treatment, for example. There are a lot of examples like this."