Mandated Benefits Review - Senate Bill 1198 - Staff Analysis of Act 34 Requirements
(in response to the eight requirements of Act 34, Sec. 9)


Act 34 of 1993 provides that the documentation submitted to the Council by supporters and opponents of a proposed mandated benefit should address eight specific areas. In reviewing these eight points, Council staff performs a preliminary review to determine whether the information received is sufficient to warrant the formal Mandated Benefits Review process outlined in the Act. Following are Council staff findings pertaining to the documentation received for Senate Bill 1198 addressing each of these eight points.

Summary of Responses to Senate Bill 1198

In our 1996 review we wrote, "the Pennsylvania Health Care Cost Containment Council concludes that it is unable to make a recommendation regarding the passage of Senate Bill 1334 [mandating coverage of cancer clinical trials] in its current form, and that it is unlikely that a formal Mandated Benefits Review Panel could or would conclude any differently, now or in the future."

One of the reasons for our conclusion was that neither proponents nor opponents provided the Council with sufficient information on which to base a cost-benefit analysis. For example, no definitive data was provided to the Council regarding how many Pennsylvania residents participate in cancer clinical trials, how many of these individuals are declined insurance coverage of patient care costs, or how many do not enroll in cancer clinical trials due to real or perceived problems with insurance coverage. No information was submitted to the Council regarding actual or estimates of patient care costs which are incurred by participants in cancer clinical trials.

Today, two years after our report on Senate Bill 1334 (of 1995), the Council finds that submissions on Senate Bill 1198 did not provide the Council with additional information on this issue that would enable Council staff to perform a comprehensive cost-benefit analysis. Furthermore, opponents provided information which strengthened their position.

Since the supporters of Senate Bill 1198 were unable to provide the Council with information which improves upon or is different to what we reported in 1996, our position on the issue of insurance coverage for cancer clinical trials remains the same.

Specific Responses to the Eight Categories Required by Act 34

  1. The extent to which the proposed benefit and the services it would provide are needed by, available to and utilized by the population of the Commonwealth.

    The Council did not receive sufficient information on which to assess the need for, the availability of, and utilization of cancer clinical trials in Pennsylvania.

    Submissions provided information on the general incidence of cancer in Pennsylvania. For example, in their submission, Highmark provided figures from the American Cancer Society which estimate that in 1998, 68,800 new cases of cancer will be diagnosed in Pennsylvania. Some of the more common cancer diagnoses include: breast cancer (10,800 cases), prostate cancer (10,400 cases), lung cancer (9,100 cases), colorectal cancer (7,900 cases), non-Hodgkin's lymphoma (3,200 cases), melanoma (2,200 cases), endometrium (uterine) cancer (2,200 cases), ovarian cancer (1,500 cases), and cervical cancer (700 cases).

    According the American Cancer Society estimates, 31,600 Pennsylvanians will die of cancer in 1998. Some common causes of cancer mortality include: lung cancer (8,500 cases), colorectal cancer (3,400 cases), breast cancer (2,600 cases), prostate cancer (2,200 cases), cancer of the pancreas (1,500 cases), non-Hodgkin's lymphoma (1,400 cases), leukemia (1,200 cases), ovarian cancer (800 cases), and cancer of the esophagus (700 cases).

    While certain types of cancer are difficult to treat, many cancers already appear to be treated effectively if diagnosed at an early stage. For example, according to the American Cancer Society figures, if prostate cancer is diagnosed in the local stage, the five-year relative survival rate is 100%. Other examples of five-year survival rates for cancer diagnosed in the local stage include: breast cancer (97%), cervical cancer (91%), colon cancer (93%), endometrium (uterine) cancer (96%), kidney cancer (88%), melanoma (95%), ovarian cancer (93%), cancer of the rectum (88%), testicular cancer (99%), cancer of the thyroid (100%), and urinary bladder cancer (94%).

    The only submission which addressed the availability of cancer clinical trials was received in response to the review of Senate Bill 1334. The Fox Chase Cancer Center submission stated, "Residents of the Commonwealth have available to them roughly 300 clinical trials at any given time across the range of cancer types and stages of disease." Although Fox Chase did not provide evidence of this statement, Council staff found that on July 30, 1998, there were 307 cancer clinical trials sponsored by the National Cancer Institute underway in Pennsylvania. In addition, the National Institutes of Health was sponsoring 1 cancer clinical trial and 48 cancer clinical trials were being sponsored by pharmaceutical companies.

    On the issue of utilization, the Fox Chase submission stated, "Approximately 3200 Pennsylvanians, both adults and children, participate in cancer clinical trials each year. This represents 4 percent of the Commonwealth residents diagnosed with cancer in 1996." Again, the Fox Chase submission did not provide any support for this statement. The Managed Care Association stated, "Johns Hopkins University estimates that approximately three percent of cancer patients across the country are enrolled in approved clinical trials," but they also fail to provide documentation. In their submission the Insurance Federation cites the following statistics, "67,000 new [cancer] patients are diagnosed every year in Pennsylvania, with only 35,000 beginning systemic cancer therapy. Of the latter, only 1,050 receiving such therapy do so as part of a clinical trial." In conducting research, Council staff was unable to locate independent information on the number of Pennsylvania residents who participate in cancer clinical trials.

    The Council acknowledges that clinical trials have an important role in the development of new drugs and treatments. We recognize that clinical trials have led to the advancement of effective new therapies and made contributions to cancer treatment. The specific need for insurance coverage of cancer clinical trials, however, was not proven. For example, although Pennsylvania does not currently require coverage of clinical trials, numerous trials are available to and utilized by Pennsylvania residents.

    Ultimately, while the Council received some general information concerning the incidence of and mortality due to cancer, this information was not specific to cancer clinical trials. Based on the submission from Fox Chase and research conducted by Council staff, there appear to be over 300 cancer clinical trials which would qualify for reimbursement under Senate Bill 1198 (i.e. trials sponsored by the National Institutes of Health, including the National Cancer Institute), however utilization of these cancer clinical trials has not been established.

  2. The extent to which insurance coverage for the proposed benefit already exists, or if no such coverage exists, the extent to which this lack of coverage results in inadequate health care or financial hardship for the population of the Commonwealth.

    Overall, we found that neither supporters nor opponents of the bill submitted sufficient, specific information regarding Issue ii. While opponents provided some general information, it was not sufficiently specific to understand the true "picture" of this issue for the "population of the Commonwealth." Furthermore, many of the submissions Council received for Senate Bill 1198 did not include new information, but referred to information submitted for the review of Senate Bill 1334 in 1996.

    Highmark discussed the Blue Cross and Blue Shield Association's Pediatric Cancer Network which includes over 180 hospitals, including 6 in Pennsylvania. Blue Cross and Blue Shield plans will cover the cost of treatment rendered by network providers, whether the treatment is deemed investigational or standard. Therefore, Blue Cross and Blue Shield plans already provide comprehensive access to all treatments, including investigational therapies, for children enrolled in the programs.

    The Managed Care Association stated, "As noted in Senate Bill 1334 (during the 1995-96 legislative session), the existence and extent of health insurance coverage for patient care costs associated with cancer clinical trials is admittedly high - approximately 70 percent." Council staff notes on page one (lines 18 through 20), Senate Bill 1334 (of 1995) stated, " ... it is estimated that the expenses associated with approximately 70% of all cancer clinical trials are currently reimbursed ..." This phrase, however, is not included in Senate Bill 1198.

    The Fox Chase submission noted that, "There is no state-wide data available on clinical trial reimbursement policies or denial rates. One major cancer center experiences initial denials for 15 percent to 20 percent of its patients on clinical trials, and another has roughly five patients per month denied prospectively for NCI-approved [National Cancer Institute approved] trials. Fortunately, many of these decisions are reversed upon appeal." If 15 to 20 percent of patients are initially denied coverage, then it is assumed that the remaining 80 to 85 percent of patients are reimbursed for participation in cancer clinically trials. In addition, since "many of these decisions are reversed upon appeal," this would suggest that the number of patients ultimately receiving coverage for their participation in clinical trials may be closer to 90 or 95 percent.

    Some health insurance policies have exclusions for "experimental" or "investigational" treatments or procedures. Since clinical trials are designed to establish the efficacy of the treatment or procedure in question, they are, by their very nature, experimental or investigational. Therefore, if an insurance policy excludes experimental or investigational treatments from covered treatments, they would (by definition) exclude clinical trials. For example, in their submission, the Insurance Federation included an excerpt from an insurance policy which stated that a treatment is considered to be experimental or investigational if "Reliable evidence shows that the Treatment is the subject of any on-going Phase I or Phase II Clinical Trial; ... the relative effectiveness of the Treatment compared to standard therapy or to no therapy has not been proven to be as good as, or better by completed randomized Phase III Clinical Trials."

    Highmark stated that all of their contracts exclude coverage for services that are classified as experimental and/or investigational. Highmark provided a two-fold reason for this exclusion: (1) "to provide coverage for services only after they are proven to be safe and effective," and (2) "to use finite financial resources to provide the highest quality health care to those subscribers while maintaining the affordability of health insurance coverage." In their submission, the Insurance Federation stated, "... the hallmark of health insurance coverage has always been the provision of treatments of proven safety and effectiveness." Insurers may, therefore, be concerned about the fact that by definition, clinical trials have not been proven to be effective.

    One may wonder that if some health insurance policies exclude experimental or investigational treatments, and clinical trials are considered to be of an experimental or investigational nature, then how are anywhere from 70 percent to 95 percent of patients receiving insurance reimbursement for their participation in such trials. The answer is relatively simple. First, as the Managed Care Association noted, "Some HMOs [health maintenance organizations] do offer additional benefit riders to health care purchasers to cover costs associated with experimental procedures."

    Secondly, some insurers do opt to provide coverage for clinical trials on an individual basis depending on the health of the patient, the type of cancer, the stage of the disease, etc. Insurers may make their decision to provide reimbursement based on a variety of factors. For example, the Insurance Federation submitted a report by the United States General Accounting Office regarding insurance coverage for high dose chemotherapy followed by an autologous bone marrow transplant for the treatment of breast cancer. Although this procedure had not shown to be definitively more effective than traditional chemotherapy, many insurers were covering this procedure. The report concluded that, "Although it is widely considered an experimental therapy, many health insurers are covering ABMT [autologous bone marrow transplant] following high-dose chemotherapy for breast cancer. The 12 insurers we spoke with said they based their decision to cover the treatment on the preliminary clinical evidence, but also on factors like fear of litigation and adverse public reactions." The report noted that "For five of these [twelve] insurers, legal concerns were characterized among the most important reasons for choosing to cover ABMT [autologous bone marrow transplant] for breast cancer." Therefore, insurers may choose to cover experimental treatments due to factors such as preliminary evidence of effectiveness, fear of litigation, and public demand.

    The Council received information which suggested that insurers have procedures to review requests for coverage of investigational treatments. For example, Highmark submitted an article outlining the procedures of the New Technology Review Committee of the Kaiser Permanente Medical Care Program in Northern California. This Committee manages a program which determines, on an individual basis, whether or not investigational therapies will be covered by Kaiser Permanente. The program includes an internal review, an internal review of an ad hoc clinical expert group, and an independent review by a group of experts from the Medical Care Ombudsman Program. If, at any point in the internal review, the request is approved, Kaiser Permanente will cover the costs of treatment. If the request progresses to the independent panel and a majority of the panel believes that referral to a clinical trial for an investigational treatment is appropriate, then Kaiser Permanente will cover the cost of treatment. The article stated that in the first three years, only 18 cases required second-level review. Of these eighteen cases, six were appealed to the independent panel of experts, where three were approved for coverage. In other words, of all the requests for coverage of an investigational treatment over a three-year period, only three patients were denied coverage for investigational therapies. (Beebe)

    On the issue of whether a lack of coverage for cancer clinical trials results in inadequate health care, "The [Insurance] Federation believes that its prior [1996] position that the lack of this benefit does not cause inadequate health care or financial hardship in the Commonwealth is justified." In their submission, the Insurance Federation stated, "At least in terms of traditional thinking and structure of the insurance industry, the failure to provide something that may not work or of unproven safety was not deemed a lack. Similarly, any financial hardship brought on by the lack of insurance for clinical trials, while tragic for those involved, must derive in part from a voluntary decision to follow a course of treatment not covered by insurance."

    The Council notes that the lack of coverage for cancer clinical trials is not synonymous with the lack of coverage for cancer treatments. Even if reimbursement for participation in a cancer clinical trial were to be denied, insurance would still cover the costs of traditional cancer treatments. Since participation in a cancer clinical trial is voluntary, a patient who chooses to participate in such a trial, if denied coverage by his/her insurer, is choosing to take on the cost of such treatment. The patient may also choose to undergo standard cancer treatment which would be covered by his/her insurance.

    By design, Phase III and Phase IV clinical trials compare the new treatment with the established, traditional treatment. In these trials, participants are randomly assigned to a treatment group (new treatment) or a control group (standard treatment). In order for a clinical trial to be effective, some participants must receive standard treatments. Therefore, just because a patient elects to participate in a clinical trial does not mean that he/she will receive the new treatment. If a patient is assigned to a standard treatment group, he/she will receive the same treatment as they would have received if they had not participated.

    The Fox Chase submission stated that since some patients go through a "burdensome" process to have their participation in a clinical trial approved, they may no longer be eligible to participate in the trial as their disease may "have progressed beyond the trials' criteria..." Fox Chase provided no information to suggest the number of patients who are affected in this way. Standard cancer treatments would be available to these patients.

    The submission by the Managed Care Association noted that, "In addition to private insurance, there are other sources of coverage for cancer clinical trials. For example, the sponsors of the cancer clinical trial or research entity may be responsible for the costs associated with the study design and gathering data. If a particular drug or device is being tested, the sponsoring manufacturer may provide the drug or device free of cost." For example, pharmaceutical companies may cover patient care costs in clinical trials when a new drug is under study. In their statement, PhRMA (The Pharmaceutical Research and Manufacturers of America) noted, "Coverage of patient costs associated with clinical trials varies; the sponsor, whether a private company or a public agency may provide and/or pay for all necessary health care. In other cases, the sponsor may pay for the treatment being studied and the patient's health care plan may pay for the additional health care costs associated with participating in the trial." Therefore, methods other than insurance may be available to patients to finance their participation in cancer clinical trials.

    Based on the information submitted to the Council, it would appear that coverage for participation in cancer clinical trials is readily available to Pennsylvanians, either through insurance or the sponsor of the trial. Since those denied coverage for cancer clinical trials are still eligible for coverage for standard cancer treatments, the lack of the benefit does not necessarily result in inadequate health care. In addition, since it is a patient's choice as to whether to participate in a clinical trial, any financial burden experienced by the patient is also part of that decision.

  3. The demand for the proposed benefit from the public and the source and extent of opposition to mandating the benefit.

    Although general information was submitted to the Council by both supporters and opponents, specific data regarding the extent of the public demand or the extent of the opposition was insufficient.

    Support for Senate Bill 1198

    Three submissions were received by the Council in support of Senate Bill 1198. One was from the directors of Pennsylvania's three National Cancer Institute - designated comprehensive cancer centers singed by John H. Glick, M.D., Director of the University of Pennsylvania Cancer Center; Ronald B. Herberman M.D., Director of the University of Pittsburgh Cancer Institute; and Robert C. Young, M.D., Director of Fox Chase Cancer Center. In their letter, the directors wrote, "Clinical trials represent the best hope for advancing cancer medicine, as they are the final step in the process of developing new drugs and other means to fight disease." They also stated, "While we recognize that the efficient use of health care dollars and the containment of health care costs are necessary considerations when determining the impact of any new piece of legislation, we are convinced that the denial of payments for routine patient care costs for approved cancer clinical trials threatens to impede the development of effective new therapies, and severely limits patient access to promising and potentially life-saving new therapies." The Council was urged by this group to re-review the documentation they submitted in 1996. The cancer centers did not submit any additional documentation to the Council.

    The second letter of support came from the Association of Community Cancer Centers. This letter states, "The ACCC [Association of Community Cancer Centers] strongly supports the comments and documentation provided by Dr. John Glick, Dr. Ronald Herberman and Dr. Robert Young."

    The final source of support was from PhRMA, The Pharmaceutical Research and Manufacturers of America. In their statement, PhRMA supports legislation to mandate coverage of clinical trials and encourages "providers, health plans, and clinical trial sponsors to work together to ensure that patients have access to clinical trials."

    The Council was provided with no additional information in support of Senate Bill 1198. Therefore, no new supporting information was received since the Council reviewed similar legislation in 1996. 

    Opposition to Senate Bill 1198

    The opposition to Senate Bill 1198 comes from health care purchasers and insurers. These groups are concerned that mandates contribute to rising health care costs, which lead employers and individuals to cancel policies and thereby increase the number of uninsured. Opponents also contend that mandates are an unwanted intrusion into the health care marketplace which does not allow purchasers to tailor health insurance packages to suit their needs.

    Insurers express particular opposition to Senate Bill 1198. In addition to their general concerns about mandates, they (1) view the proposal as a "tax" designed to fund cancer research and thus serve a "quasi public function"; (2) believe that providing coverage for established treatment options is in the best interests of their subscribers; (3) believe the proposal would create an inequity between coverage for cancer clinical trials and clinical trials for other diseases; and (4) express concerns that the institutional review boards designed to protect patients participating in clinical trials are overworked and need to be reformed.

    The Insurance Federation resubmitted the following statement from their submission for the 1996 review: "While well intentioned, the bill is also inconsistent with sound health care and economic theory. ... quite apart from whether the testing this bill promotes is good or bad, what this bill does (and the only thing this bill does) is shift the burden of much of that testing onto Pennsylvanians with health insurance, the vast majority of whom are insured through their employers. This is indistinguishable from a tax on those citizens and represents a judgement that they, rather than all citizens, ought to bear the costs of these tests."

    The Insurance Federation follows up with this issue in their 1998 submission which stated, "The Federation notes that by introducing the element of public testing of experimental therapies, the bill asks the insured Pennsylvania citizen to bear a kind of tax for the common good to support research. ...It is one thing to say, as proponents of this bill have, that some experimental procedures get covered in the ordinary course or because some insurers have made business decisions not to fight a particular claim for coverage. It is another thing altogether to change the purposed and function of a health policy to a quasi public function. When you do that, as the Federation points out, the General Assembly is not just mandating a particular health benefit, it is essentially engaging in taxation."

    The Managed Care Association stated, "in addition to providing high quality, cost effective coverage, health plans have the responsibility of protecting their members from treatment that may be harmful or of no therapeutic value. This is why health plans have developed sophisticated assessment capabilities around clinical trial issues." Highmark similarly stated they exclude experimental treatments from their policies in order "to provide coverage for service only after they are proven to be safe and effective ..." The Insurance Federation stated, "... the traditional aim and objective of health care coverage is to pay for effective and safe personal healing procedures to treat health conditions against which purchasers want to guard." By these statements, insurers suggest that by requiring them to cover treatment, which by its very definition is experimental and/or investigational, they are exposing their subscribers to treatments which have not been proven to be safe and/or effective.

    Some opponents suggest that the mandates proposed in Senate 1198 could cause an inequity between coverage for cancer clinical trials and other clinical trials. The Insurance Federation stated, "the ramifications of this departure ... from the traditional scope of health insurance make very relevant the other inequities to which the [Insurance] Federation points. For example, of all of the scourges which society would like to erase, clearly cancer is high up on the list. However, when it comes to an intentional legislative fiat to put it in line, and first in line, for private insurance funding or research, how does the legislature rationalize this? Is it by relative seriousness, percentage of population afflicted, cost to society, cost of treatment or what specific criteria? Why doesn't heart disease, HIV, the common cold, or highway traffic safety have just as legitimate a theoretical claim on insurance funding of experimental procedures as clinical cancer trials?"

    Clinical trials are conducted for a variety of health afflictions such as heart disease, diabetes, HIV/AIDS, as well for all drugs which are approved by the Food and Drug Administration. Limiting coverage to only those clinical trials connected to cancer may have ramifications for other diseases. On this issue, the Council notes that Maryland recently enacted legislation requiring insurers to cover clinical trials for life-threatening diseases which did not limit the scope of their legislation to cancer clinical trials.

    Finally, opponents are concerned that the system of Institutional Review Boards used to approve clinical trials is overworked and in need of reform. Both the Insurance Federation and the Managed Care Association submitted articles concerning Institutional Review Boards. In testimony to a U.S. House of Representative Committee, George Grob, the Deputy Inspector General for Evaluation and Inspections of the U.S. Department of Health and Human Services stated, "the IRB [Institutional Review Board] system which has provided important protections for human subjects for so many years, needs to be reformed." The reasons for this are six fold:

    1. IRBs [Institutional Review Boards] face major challenges in today's research environment. When they were created, IRBs typically reviewed government-funded research which took place in university teaching hospitals. Now, research takes place at various medical institutions possibly involving multiple sites around the country with thousands of participants. IRBs are pressured by commercial sponsors of research for quick turnaround time. In addition, "Patients and consumers now demand access to research trials in the hopes of some benefit or treatment for life-threatening illnesses."
    2. IRBs' ongoing review of research after it has started has become a low priority.
    3. IRBs are now asked to review too much information too quickly. The inspection conducted by DHHS found average increases of 42 percent in initial reviews during the past five years. They also found, "Some of them [Institutional Review Boards] are now reviewing more than 2,000 protocols annually." DHHS notes that, "The increased workload coupled with resource restraints, causes problems for IRBs and threatens the adequacy of their review. ... Science is becoming increasingly complex and many IRBS find that they lack sufficient scientific expertise on their boards or staffs to adequately assess protocols."
    4. There is little or no emphasis on evaluating the effectiveness of IRBs. "IRBs have little basis for knowing how well they are accomplishing their mission of protecting human subjects. ... Seldom, we found, do the IRBs seek out feedback from human subjects or their families. Nor do they often examine the complaints that they do receive to determine if they reflect broader, system problems or inquire as to how well the informed consent process is actually working."
    5. IRBS face conflicts of interest. "... we found that many IRBs we spoke with face conflicts that could lessen their objectivity. Clinical research, particularly from commercial sponsors, is an important source of revenue and/or prestige for most institutions. For example, at one of the academic medical sites we visited, about 25 percent of the operating budget (nearly $200 million) derives from research activities. We found several examples of hospital IRBs that were housed in offices of grants and contracts or of clinical research programs, the very offices geared to bring in research dollars."
    6. IRBs provide little training for their members. "An understanding of these [complicated ethical] issues is also essential for research investigators who, themselves, initiate the informed consent process and interact directly with research subjects. ... For new IRB members, their orientation to the role is seldom much more than a stack of materials to read and on-the-job learning."

    General Opposition to Health Insurance Mandates

    Both the purchaser and provider communities expressed strong opposition to the general idea of legislatively imposed health care mandates. In general, submissions contend that mandates result in rising health insurance costs, which cause employers and individuals to drop coverage, and thereby contribute to the increasing number of uninsured. The following are some of the arguments made by opponents of mandates:

    From the submissions received by the Council, it is unclear from where the demand for the benefit arises, although the information suggests support comes primarily from cancer centers and pharmaceutical companies. Likewise, the Council did not receive sufficient information on which to conclude the extent of that demand. In particular, it is noteworthy that no new information was submitted in support of this mandate. While opposition to the benefit was found to be from health care purchasers and insurers, the Council did not receive sufficient information to conclude the specific extent of that opposition.

  4. All relevant findings bearing on the social impact of the lack of the proposed benefit.

    While the social impact of cancer is clear, the Council did not receive sufficient information to assess the social impact of a lack of coverage for cancer clinical trials. The Council notes, however, that even without legislatively imposed reimbursement for costs associated with cancer clinical trials, many trial participants do have their costs covered by an insurer. Furthermore, coverage for standard cancer therapies is available to most cancer patients through their current insurance.

    Proponents of Senate Bill 1198, contend, however, that denying coverage for costs associated with cancer clinical trials hinders research and the development of potential life-saving, cost-effective treatment options. The letter submitted by the directors of three Pennsylvania cancer centers stated, "we are convinced that the denial of payments for routine patient care costs for approved cancer clinical trials threatens to impede the development of effective new therapies, and severely limits access to promising and potentially life-saving new therapies."

  5. Where the proposed benefit would mandate coverage of a particular therapy, the results of at least one professionally accepted, controlled trial comparing the medical consequences of the proposed therapy, alternative therapies and no therapy.

    It should be recognized that Senate Bill 1198 does not cover one particular therapy, but rather any therapy under investigation in a cancer clinical trial. Since the purpose of clinical trials is to assess the effectiveness of new therapies, results of the study are not available until after the clinical trial is completed. Therefore, by requiring insurers to provide coverage for cancer clinical trials, they would be required to cover treatments which, by definition, are investigational or experimental, and have not yet be proven to be safe and/or effective.

  6. Where the proposed benefit would mandate coverage of an additional class of practitioners, the result of at least one professionally accepted, controlled trial comparing the medical results achieved by the additional class of practitioners and those practitioners already covered by benefits.

    This discussion is not relevant to the mandates proposed in Senate Bill 1198.

  7. (vii) The results of any other relevant research.

    Information regarding research is discussed in other sections of this report.

  8. Evidence of the financial impact of the proposed legislation, including at least:
    1. The extent to which the proposed benefit would increase or decrease cost for treatment or service.

      Proponents and opponents did not provide Council staff with sufficient information on which to determine the exact impact Senate Bill 1198 will have on the cost for treatment or service. Submissions suggest, however, that the cost for treatment may increase.

      The Fox Chase submissions stated that, "The costs of care to the insurer for patients treated on clinical trials are anticipated to be comparable to the costs of treating these patients on standard treatment." One of the reasons Fox Chases gives for this statement is that, "The alternative to a clinical trial is standard therapy, not no treatment at all. ... Thus, insurers have been incurring and will continue to incur the cost of the standard therapy for patients not enrolled in a trial. The only relevant question is whether the costs of the clinical trials will be more than the costs of standard therapy."

      Council staff notes, however, the submission from the Insurance Federation which stated, "the argument for paying the 'routine costs of care' apparently rests on the false premise that such costs will be paid anyway so that the [health] plan is only bearing costs which would have been paid had the patient remained outside the clinical trial and received traditional care within the plan. This is incorrect. If a patient is enrolled in a trial, the cost of the routine care can be significantly different than if the patient had remained within the covered course of treatment. Various expenses may be higher. For example, the cost of an MRI in a research or academic center setting may be higher than that for a managed care plan network. Further, the volume of tests, laboratory services or other supporting services may be very different in a research setting. Therefore, the idea that a plan should 'pay what it would have paid' is erroneous." Council staff further notes a booklet put out by the National Cancer Institute which stated, "[If you participate in a clinical trial] You may have more tests and doctor visits than you would if you were not taking part in a study."

      Based on the submissions to the Council, staff recognize that only "routine patient care costs" would be reimbursed under Senate Bill 1198, but suggest that these costs may be higher than the patient care costs associated with standard therapy. No information was submitted to suggest the amount of difference in costs which may be expected.

    2. The extent to which similar mandated benefits in other states have affected charges, costs and payments for services.

      While some states have legislation similar to Senate Bill 1198, no state has enacted legislation exactly like Senate Bill 1198.

      In 1995, Rhode Island enacted legislation which required insurers to provide coverage for patient participation in Phase III and Phase IV cancer clinical trials. This legislation had a sunset date of December 30, 1996. In July of 1997, another piece of legislation was enacted to mandate coverage for Phase III and Phase IV cancer clinical trials with no sunset date. No submissions provided information on the costs in Rhode Island.

      In July of 1997, Rhode Island also enacted legislation which mandated coverage for Phase II cancer clinical trials. This legislation has a sunset date of December 21, 1998, and will therefore be in effect only for 18 months. Information on the costs associated with mandated coverage of Phase II clinical trials is not yet available.

      Maryland recently enacted legislation requiring insurers to cover the cost of clinical trials for life-threatening disease, including Phase I - IV trials for cancer and Phase II - IV trials for other life-threatening diseases. (The Maryland legislation does not specify what are considered to be other life-threatening diseases.) This legislation takes does not take effect until January 1, 1999, so the cost cannot be assessed.

      As of July 1, 1998, Georgia now requires insurers to cover routine medical costs when children diagnosed with cancer participate in cancer clinical trials. No information was submitted to the Council addressing the cost of this legislation. Staff notes that since children account for only about 3 percent of all cancer patients, the Georgia legislation is not truly comparable to Senate Bill 1198.

      There are some states with legislation mandating coverage for particular cancer treatments considered to be investigational. For example, some states including Kentucky and Virginia, require insurers to cover the cost of high dose chemotherapy and autologous bone marrow transplants for the treatment of breast cancer. Since Senate Bill 1198 would not limit coverage to any specific investigational treatment or any specific type of cancer, the Council does not believe a comparison is appropriate.

      Ultimately, however, no information was submitted addressing the costs from similar mandates in other states.

    3. The extent to which the proposed benefit would increase the appropriate use of the treatment or service.

      Based on the submissions, it is not possible to determine the extent to which coverage for patient care costs would increase participation in cancer clinical trials. The submission from Fox Chase stated, "Approximately 3200 children and adults, or 4.1 percent of Pennsylvanians with cancer, are currently enrolled in clinical trials annually. ... We anticipate that with the enactment of Senate Bill 1334, enrollment will remain at about this 4.1 percent level." The submission from the Insurance Federation disagrees with the Fox Chase position. Their submission stated, "There is little doubt that the bill will stimulate greater use of clinical trials."

      Council staff notes that barriers other than insurance coverage prohibit participation in clinical trials. For example, even if insurance were to cover the costs associated with participation in a trial, the patient would still need to be accepted into the trial. Not all patients are candidates for clinical trials; clinical trials limit participation to those with a particular type of cancer, a specific stage of disease, and sometimes a specific age range. In addition, other health factors (i.e. heart disease, weakened immune system, etc.) may result in some patients being poor candidates for clinical trials. There are many other factors which are involved in a decision to participate in a clinical trial. For example, standard therapy may be the best treatment for many patients. Other patients may have concerns about the investigational nature of the treatment and simply not want to participate. In addition, physicians may not be aware of all of the clinical trials available or may not recommend participation in a trial.

      Since reimbursement may be a factor in deterring patients to participate in cancer clinical trials, utilization may increase by an indeterminate amount. If, however, insurance coverage for cancer clinical trials is not a contributing factor as to whether or not to participate in a clinical trial, utilization may not increase. Council staff find that submitting entities were unable to provide sufficient evidence regarding "the extent to which the proposed benefit would increase the appropriate use of the treatment or service."

    4. The impact of the proposed benefit on administrative expenses of health care insurers.

      The information submitted to the Council was insufficient to assess the exact impact Senate Bill 1198 would have on the administrative costs of insurers.

      Most submissions believe that administrative expenses will increase if Senate Bill 1198 is enacted. Highmark estimated that they would "realize a cost of approximately $2.1 million annually in administering the Senate Bill 1198 mandate."

      The Insurance Federation also believes administrative costs will increase. In their submission they stated, "From the necessity of rewriting the affected positions of health insurance policies and clearing them with the Insurance Department to defending decisions made based on definitions in the Act with the proposed Cancer Clinical Trial Review Board and through appeals from that one-sided board, major costs will be visited on insurers." The Insurance Federation concluded, "The expenses across the system will increase substantially." The Insurance Federation later suggests that mandated coverage of cancer clinical trials may raise administrative expenses by 1%.

      The 1996 Fox Chase submission disagrees with Highmark and the Insurance Federation. Their submission stated, "The impact on health insurers administrative expenses if Senate Bill 1334 is enacted should be negligible. ... In fact, insurers' administrative expenses may be reduced, since with a uniformly applied policy, and an agreed upon basis for reimbursement, less time will be spent at the front end on appealing denials for treatment and at the back end on disputing claims for treatment received."

      Given the information provided above, Council staff find that neither supporters nor opponents of the bill provided the Council with sufficient information which could be used to estimate the precise impact of the proposed benefit on administrative expenses of health care insurers. Council staff notes, however, that whenever a benefit is mandated, insurers will have to make administrative changes to reflect the new benefit.

    5. The impact of the proposed benefits on benefits costs of purchasers.

      Although enactment of Senate Bill 1198 will most likely increase the cost of health insurance, the submissions did not provide sufficient information to project the amount of increase. (For a general discussion of the impact mandated benefits have on purchasers' costs, please see (iii) above, General Opposition to Health Insurance Mandates.)

      The Highmark submission stated that, "Senate Bill 1198 would increase our annual claims expense by approximately $18.3 million." One may infer that if Highmark experiences an increase in claims of $18.3 million, this cost will be passed on to purchasers. They did not provide figures, however, suggesting the amount (in dollars or percentage) that the cost of health insurance will increase. 

      In their submission, the Insurance Federation estimated that coverage for cancer clinical trials will increase costs by 3%. They stated, "According to Dr. Nelson Braslow of MetraHealth, it is reasonable to assume that perhaps as much as 70% of the cost of clinical trials are hidden in Phase III trials and are already reimbursed. All told, about 10% of health plan costs are related to cancer. If one assumes that the additional cost would be about 30% of 10% of total costs, it means adding an additional 3% of the total costs to the system back in." The Council questions this figure, however, given the statement that 10% of health plan costs are related to cancer, but not necessarily to cancer clinical trials.

      The Fox Chase submission stated,
      "it would seem that the purchasers' costs would remain fairly stable. It is also possible that this legislation may decrease costs to insurers and thus purchasers costs by diminishing insurers' expenses for litigation, court settlements, and liability insurance."

      Based on the information received by the Council, it appears likely that the cost of health insurance will increase as a result of enacting Senate Bill 1198. To assume that an additional benefit can be added without incurring additional costs does not sound realistic. The submissions, however, did not provide sufficient information on which to estimate the exact amount of the increase which purchasers' may expedience if coverage for cancer clinical trials is mandated.

    6. The impact of the proposed benefits on the total cost of health care within the Commonwealth.

      Based on the information submitted to the Council, it is not possible to determine the exact financial impact which Senate Bill 1198 will have on the cost of health care within Pennsylvania. We do, however, believe that if Senate Bill 1198 is enacted and more patients participate in cancer clinical trials, health care costs will rise by an indeterminate amount.

      The reasons that a cost estimate is not feasible are relatively simple. First, Senate Bill 1198 would mandate coverage of any cancer clinical trial for any type of cancer. Since no specific treatments are mentioned, estimating costs is not possible based on the information submitted to the Council. Cancer clinical trials may involve testing a new preventative treatment which costs relatively little. For example, studying the effect aspirin has on preventing colorectal cancer requires little more than the cost of the aspirin and screening procedures. On the other hand, clinical trials may also involve complex medical procedures which require significant financial resources. For example, high dose chemotherapy with autologous bone marrow transplant for the treatment of breast cancer can cost up to $150,000 per participant. Since the spectrum of treatments studied in cancer clinical trials is extremely broad, it is not possible to assess the financial costs.

      Secondly, since clinical trials are designed to test new treatments, it is impossible to know what clinical trials will be underway in a year or two. Without a general idea of what treatments will be offered and the costs involved with them, any cost estimate based solely on current clinical trials would be incomplete.

      Finally, insurance coverage for cancer clinical trials does not guarantee patient participation. Clinical trials have strict selection criteria such as type of cancer, stage of the disease, and age and health of the patient. Submissions were unable to provide sufficient information suggesting the amount of increase in participation in clinical trials if insurance coverage were to mandated. It is, therefore, not possible to predict how many patients would be eligible for participation in clinical trials.