By the Numbers: $4,000

According to a new study in American Economic Journal: Applied Economics by MIT economist Joseph Doyle, a $4,000 increase in per-patient hospital expenditures equates to a 1.4% decrease in mortality rates. Doyle studied 37,000 hospitalized patients in Florida who entered through the ED from 1996 to 2003. However, he focused on those visiting from other states in order to identify variation resulting from the level of care itself, not the prior health of the patients. The greater expense—and benefits—of care in the higher-cost hospital appeared to come from the broader application of ICU tools and greater complement of medical personnel, he notes.

“There are smart ways to spend money and ineffective ways to spend money,” he says, “and we’re still trying to figure out which are which, as much as possible.”

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