More medical spending tied to better outcomes

It turns out spending more on Medicare services does translate to better overall health for enrollees, conclude researchers at George Mason University and the Urban Institute.

The study of more than 17,000 Medicare enrollees nationwide concluded that for every 10 percent increase in medical spending, there was a 1.9 percent improvement in the patient's overall health, and a 1.5 percent increase in their probability of survival.

These findings--recently published in the journal Health Services Research--are significant for hospitals because they dispute the notion that Medicare spending differs so wildly by region that it has little overall impact on care, setting the table for steep payment cuts to care facilities.

"To look for inefficiencies, you need to look more closely at specific conditions and diseases and how those are treated. Analysis from 40,000 feet just doesn't do that for you," Urban Institute researcher Timothy Waidmann said in a statement.

Although the researchers concede that the effect is modest, they conclude that "the key thing is that we did find a positive relationship as opposed to other studies which have suggested that there's no relationship between how much care a person receives and what their health outcomes are."

Fore more:
- here's the study abstract 
- read the George Mason University press release

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