MIT: More emergency room spending lowers mortality

It's a hotly contested debate on whether more money equals better care, but a new study in the American Economic Journal: Applied Economics reveals that spending more on emergency room patients can pay off by reducing mortality rates, according to Massachusetts Institute of Technology (MIT) economist Joseph Doyle.

For every $4,000 increase in hospital expenditures per patient leads to a 1.4 percentage point decrease in mortality, according to Doyle in a MIT announcement yesterday.

"More intensive and expensive treatment leads to better outcomes," said Doyle, an associate professor of Applied Economics at the MIT Sloan School of Management.

However, the idea that spending improves outcomes may vary by location. "The higher-spending hospitals use more ICU services, and they have higher staff-to-patient ratios, so they use more labor," Doyle said. "And that's expensive."

Added to the fiscal discussion around surgeries, Hospital Corporation of America (HCA)'s earnings report showed that patients may be forgoing elective surgeries due to economic woes. HCA's below-average numbers in surgeries hurt the hospital chain's revenue, according to NPR. In fact, surgical admissions in the second quarter year-over-year dropped 1.6 percent, according to the post.

To learn more:
- read the MIT announcement
- read the NPR blog post