• Making sense of spending variation studies

    Some studies show an association between greater health spending and worse (or at least not better) health outcomes. Others suggest that higher spending is associated with better outcomes. Which set of studies is correct? Read my latest post on the AcademyHealth blog for my answer.


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    • I read the blog post. What it seems to be saying is that negative correlations between spending and outcomes are artifacts of study designs that sample across different production functions. But in the little graph that you display at the end the production functions are always increasing. So the conclusion seems to be that, centers paribus, increased spending leads to improved outcomes, although with diminishing returns. Is that correct?

    • I’d be very interested in local data that uses outcomes to estimate the production functions of different hospitals in the same geographic area – and what the authors of any such paper make of the correlations.

      I can’t help but wonder what would happen if someone diverted the inbound patient population from the BMC ER to Brigham and Women’s or Beth Israel and vice versa. My unscientific conjecture is that you’d see a significant increase in BMC’s outcome-based production function for such patients, and an large equally drop in the various Longwood hospital’s outcomes despite the fact that there was absolutely zero change in how care is delivered at either location. Ditto for Harborview vs, say Virginia Mason in Seattle.