The trustees for the Medicare and Social Security trust funds recently announced — once again — that both funds would run out of money by 2024, five years sooner than they projected in 2010. Proponents of Obamacare are claiming that but for the Independent Payment Advisory Board, which issues binding recommendations on cutting Medicare spending, the situation would be even worse.
 

They say that the advisory board, using comparative effectiveness research (CER) to determine whether we can afford paying for medical innovations, is the key to avoiding financial Armageddon. But research we conducted shows that using CER to ration medical progress could lead to shorter lives and less health. Because Medicare spending has declined as people live longer and healthier lives, it will actually undermine the health and longevity of Medicare, too.
 

CER's underlying assumption is that government — through the advisory board and other government agencies using CER to decide what technologies to cover — will have to draw the line on health care spending somewhere and that "somewhere" should be medical innovations. In fact, the advisory board is prohibited from increasing co-payments or deductibles for Medicare recipients and can't cut reimbursement rates to hospitals until 2020. So the only way to cut spending by fiat is to slash what doctors get paid or say no to new technologies.
 

But the assumptions underlying the advisory board and CER are dangerously flawed. Living longer and healthier is directly associated with increasing investment in medical innovation. Since 1992, Medicare beneficiaries have been living longer, healthier lives past age 65 while disability from chronic illness has declined at an increasingly faster rate. During the same time period, the increase in per-enrollee Medicare spending has declined from 12 percent a year to less than 5 percent.
 

What effect would CER have on this positive trend? It is designed to add to the cost and time required to bring innovations to market. And because it is a precondition to making coverage decisions, CER studies carried out to look at how technologies affect the average patient will de facto become a regulatory requirement. These regulations will increase the size of clinical trials, increase development times, and add hundreds of millions of dollars to the cost of developing innovations. We estimate that the CER tollbooth will extract about $32 billion from R&D investment over the next decade and reduce the number of new products brought to market.
 

Proponents claim that's a good thing since it frees up money for other treatments and other social needs. For instance, Jonathan Skinner, a health economist from Dartmouth and a leading CER advocate, has stated that it will be used for "reallocating resources from cost-ineffective treatments for late-stage pancreatic cancer to cost-effective treatments for diabetes."
 

But because CER could ration innovations such as Provenge for prostate cancer and Avastin for late-stage breast cancer patients, we would give up improvements in our health and longer life that also help reduce Medicare spending. To the extent that there is less innovation, people could live shorter lives with more suffering.
 

What would the impact on America and Medicare be? We used a conservative benchmark for what an additional year of life could be worth to each of us ($50,000) to develop an estimate of what CER could cost America over the next decade. A $32-billion CER-caused reduction in R&D could cost us 81 million life years and $4 trillion over 20 years.
 

Skinner believes that "the antagonism toward comparative effectiveness research ... suggests a bit of magical thinking — the notion that the country can avoid the difficult trade-offs that cost-utility analysis helps to illuminate. It represents another example of our country's avoidance of unpleasant truths about our resource constraints."
 

In fact, it is CER proponents that are avoiding the truth. Our research shows that CER could lead to shorter lives in poorer health by restricting and rationing the rate of innovation. Advocates believe that continuing to invest in medical innovation at present rates will lead to disaster. But to the extent it leads to shorter lives and less well-being, Medicare costs will increase faster than before.
 

Our study confirms what Yale economist William Nordhaus has concluded: "The social productivity of health care spending might be many times that of other spending. If this is anywhere near the case, it would suggest that the image of a stupendously wasteful health care system is far off the mark." And it suggests that CER not only undermines making Medicare whole, it's dangerous to our health and quality of life, too.