Stimulus Part IV

The concept of "effectiveness review", in general, states that payers (and especially the government) should not pay for drugs and procedures not already proven effective.

(The political theory is private payers will take the lead and refuse to pay for anything not paid for by Medicare and Medicaid.)

Question: if the drugs and procedures are not paid for, and clinicians do not use them, how do we compile the evidence of effectiveness?

For drugs we do have clinical trials, but many physicians are more convinced when they see the effectiveness in clinical practice.

For surgical techniques and hardware, most progress has been made with years of trial and refinement (such as the immense progress in orthopedic joint replacement).

Will we slow innovation? How will we balance cost versus progress?