Health Care Coke Machine

08 Sep

The word function has different meanings. For example, it can describe what something is used for (e.g., the function of the brakes is to slow or stop the car), it can describe a formal event (e.g., a charitable function), or it can describe dependency of one thing on another (e.g., weight is a function of height). This last example gets closest to another use of “function” as a mathematical term.

The woman who taught me Algebra II, Trigonometry and Calculus used to explain functions using a Coke-machine analogy. When you input a value by pressing the Coke button on the machine, the machine processes that input (executes the function) and spits out the output value in the form of a can of Coke. The function is fixed, such that every time you hit the Coke button a can of Coke comes out. If we hit the Coke button and were as likely to get a can of Coke as we were a can of Sprite or Dr. Pepper, we wouldn’t have a function. There can be more than one way to get the same result (i.e., there can be more than one Coke button on the machine), but when we press a given button we always know what we’re going to get.

In health care, an important question becomes: What function defines the relationship between health care spending and health outcomes? Is the relationship linear or not? If it’s linear, then spending more and more money on health care should produce more and more improvements in health at a constant per dollar rate. Since none of us will live forever, we ought to know that there are clearly diminishing returns on our health care dollar, and that the relationship is no longer linear, but curvilinear. That is, at some point, spending more money on health care produces fewer gains in health–in fact, it may even harm health at some point.

But let’s not worry about that curved part of the line just yet. In the early going, is a dollar spent on health care equally beneficial to health? Not according to a recent Health Affairs article by Michael Rothberg and colleagues. Instead, they find that there is actually very little correlation between spending and outcomes. In some cases, spending more might be beneficial, and in other cases, spending more might just be completely wasteful. That has little to do with how much is being spent and most everything to do with understanding which treatments work and which don’t. Thus, the need for more comparative effectiveness research (CER), as I’ve harped on plenty of times before.

Without CER, we put our money in the health care Coke machine, press a button and hope to get better. Sometimes we get what we’re after. Other times, nothing comes out at all. We’re making a good investment in the first case, and a terrible waste in the second. If our goal is to buy as much good health as possible with the money in our pocket, we would do well to figure out which buttons on the machine don’t work, and make sure that after we feed in our dollar, we never press those buttons. That’s the potential of CER in health care reform: Making sure we stop paying for things that don’t work.


Posted by on September 8, 2010 in Uncategorized


4 responses to “Health Care Coke Machine

  1. Phil Childs

    September 9, 2010 at 2:23 am

    What if there was a diagnostic test that was- relatively inexpensive- very reliable – detects a desease that very very very rarely happened.The CER formula may determine this test is not worth the money, therefore a government sponsored health plan would not pay for it, Dr's may even be encouraged not to suggest it. What if that test would save your life?Is this a scenario where CER would fail the customer… even if they would have been willing to pay 100% of the cost?

  2. D. Brad Wright

    September 9, 2010 at 12:38 pm

    Phil, Given the conditions you specify, CER would not discourage the use of this test. First of all, CER focuses solely on comparative effectiveness–it does not take cost into account (that's cost-effectiveness analysis)–and it can only be employed if there are at least two diagnostic or treatment options. So, if this is the only test of its kind, then there will be no CER study. If there were another test for this disease, a CER study could be used to determine which test was better (which involves sensitivity and specificity). If one of the tests was only a slightly better diagnostic tool, but cost far more, then Cost-Effectiveness Analysis might be used. In either case, if the patient is willing to pay 100% of the costs, they'd be able to get anything and everything. The government isn't setting limits on care. This is one of people's major fears, but it is, I am happy to say, completely unfounded.

  3. Jan Baer

    September 9, 2010 at 7:33 pm

    I don't foresee a time when a patient would be refused any test (s)he was willing to pay for out-of-pocket.Insurance companies already use CER; in this respect, we should take a long look at their practices and the means by which they have established them.There are situations where insurance companies require a certain procedure be done first, before another can be administered. An example of that might be arthroscopic surgery before a joint replacement. Although the former might be less likely to remedy the problem, it is often the fist attempt – sort of a "just in case this works" sort of thing. What's the "right" thing to do in cases like that? Administer a procedure unlikely to work, putting the patient through an extra ordeal, or simply move straight to the big guns?These are delicate issues and decisions are very costly. Currently, choices are usually bound within the health insurers' allowable procedures, but at some point it might be tax dollars at stake, and in both cases it seems best to choose wisely.

  4. Phil Childs

    September 16, 2010 at 12:22 pm

    Thanks for the info!


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