On August 1, Sens. Max Baucus (D-Mont.) and Kent Conrad (D-N.D.) introduced the Comparative Effectiveness Research Act of 2008 (S. 3408) which would create a comparative effectiveness institute that the Congressional Budget Office estimates could save the U.S. health system $700 billion annually.

The U.S. spends far more per capita on health care than any other developed nation, yet does not produce correspondingly better health outcomes. Policymakers believe that a comparative effectiveness institute could provide independent reviews of therapies and procedures so that health plans, hospitals, and public health programs can "spend smarter" on health care.

The Health Care Comparative Effectiveness Research Institute would work with the National Institutes of Health, the Agency for Healthcare Research and Quality and private entities, and would function as a not-for-profit private entity, not a federal agency.

Baucus and Conrad believe that this type of public-private institute is essential to consider in the context of health care reform as it will help to control health care costs and cover the uninsured. A comparative effectiveness research institute would inform health care providers and consumers on best practices and the research would help to establish a value-based purchasing system.

As stated in NSBA’s principles for health care reform, too often the third-party payment system financially rewards providers for unnecessary and bad health care. NSBA believes that both quality and cost can be kept in check by establishing a pay-for-performance system where evidence-based indicators and protocols would hold providers accountable. H.R. 3408 is an important element in reforming our nation’s health care system.