Arizona Medicaid Transplants and Comparative Effectiveness

With rising unemployment and increasing Medicaid enrollment, state Medicaid programs are facing significant coverage cuts. In Arizona, coverage for certain transplants of the heart, liver, lung, pancreas and bone marrow was eliminated on October 1, 2010.

Beyond the rhetoric, the debate boils down to comparative effectiveness research.

The Associated Press quotes Arizona Republican Rep. John Kavanagh, who leads the House appropriations committee, as saying "We need to fund what works and not fund what doesn't work and pay for what we can afford."

So transplants aren’t cost effective? Dr. Yeager, the director of the Blood and Marrow Transplantation Program at the Arizona Cancer Center, claims that they have the efficacy data to refute Arizona Governor Jan Brewer’s decision.

But it really is it that simple?

Terasaki, Ozawa and Castro (2003) calculated kidney dialysis at an annual cost of $67,506, but report the annual anti-rejection medication for kidney transplants at $13,749. Using Medicare as an example, they calculate the savings to the 128,000 functioning transplants in 2003 to be roughly $344 million dollars per year for the U.S. government. This article also supports the cost effectiveness of Medicare’s kidney transplant policies.

Kidney transplants are cost-effective, but the other types may not be. Heart and lung transplants remain expensive, with quality-adjusted life-year gains at about $50,000 per year. Some experts consider this within the cost-effective range.

The New York Times quotes Alan Weil, the executive director of the National Academy for State Health Policy, as saying that Arizona’s cuts are “a precursor to a much larger number of states having this discussion.” In my state, Florida, no changes in coverage for heart, liver, lung bone marrow, and retinas were made at the most recent Florida Organ Transplant Advisory Council October 2010 meeting.

However, the budget shortfall in Florida will continue to grow – with Medicaid acting as “the single largest driver in next year’s budget projections.” Hopefully, Florida will use the comparative effectiveness studies to inform their decisions.