A new MIT study has demonstrated that when more money is spent treating emergency room patients, more lives are saved. The study has been published in the American Economic Journal: Applied Economics. To some this may seem obvious, however the researchers point out that this issue has been debated by economists and policy specialists extensively for many years, without really coming up with a clear answer.
Joseph Doyle and team wrote:
"More intensive and expensive treatment
leads to better outcomes."
The researchers examined tens of thousands of cases of outside visitors being admitted to emergency rooms in Florida over a period of several years.
It has been shown that some states in the USA that spend more overall on health than others do not achieve better mortality rates. This has lead to uncertainty regarding value for money. Put simply, if spending more overall on health does not necessarily lead to better results, why would spending more on emergency room care be any different?
Some economists, however, have shown that spending more does have positive results. In many cases, a higher-spending hospital that has poorer death rate figures than another lower-spending one is simply treating a higher percentage of sicker patients.
Doyle and team devised a novel way of studying the problem. They only looked at emergency-room patients who had been visiting Florida. By doing this, they managed to eliminate variables which can impact on the findings, such as local patient differences on medical spending.
They gathered data on almost 37,000 patients who had been admitted to hospital from 1996 to 2003 from the Florida Agency for Healthcare Administration (patient-discharge data). They analyzed patient data according to age, ZIP code, and when they came to visit.
Doyle explained that Florida is like a microcosm of the USA, with wide variations on how patients are treated after heart attacks - some areas are high-spending while others are low. For example, Fort Lauderdale hospitals spend on average 30% more on heart patients than do those in neighboring affluent West Palm Beach.
By studying the problem in this way, their variations in results do not come from a patient's prior health care issues, but from the level of care itself, specifically, how much was spent. The higher spending hospitals had a broader application of ICU (intensive care unit) tools and had a better staff-patient ratio.
A 50% rise in a hospital's "spending intensity" was found to reduce death rates due to heart problems by approximately 26% below the mean, the authors reported.
Current research is trying to identify which medical technologies provide the best value for money, the authors wrote.
Doyle and team are currently trying to determine what the outcomes are when similar groups of patients go to different hospitals.
"Returns to Local-Area Health Care Spending: Evidence from Health Shocks to Patients Far from Home"
Joseph J. Doyle
American Economic Journal: Applied Economics Vol. 3, No. 3, July 2011. DOI:10.1257/app.3.3.221