Is health care good for you after all?

by on August 15, 2007 at 12:11 pm in Medicine | Permalink

This paper is very clever:

Health care spending varies widely across markets, yet there is little
evidence that higher spending translates into better health outcomes,
possibly due to endogeneity bias. The main innovation in this paper
compares outcomes of patients who are exposed to different health care
systems that were not designed for them: patients who are far from home
when a health emergency strikes. The universe of emergencies in Florida
from 1996-2003 is considered, and visitors who become ill in
high-spending areas have significantly lower mortality rates compared
to similar visitors in lower-spending areas. The results are robust
across different types of patients and within groups of destinations
that appear to be close demand substitutes.

Here are non-gated versions.

Person August 15, 2007 at 12:19 pm

The universe of emergencies in Florida from 1996-2003 is considered, and visitors who become ill in high-spending areas have significantly lower mortality rates compared to similar visitors in lower-spending areas.

Uh, what? Wouldn’t that signify higher spending as being *more* helpful?

thehova August 15, 2007 at 1:53 pm

yes, i agree with JB.

This seems to indicate the effectiveness of emergency services.

and even more strongly, it indicates the ineffectiveness of preventive care/family care services/etc….

angus August 15, 2007 at 2:16 pm

The idea of the paper, what makes it clever, is the way it tries to get around endogeneity bias. Suppose town A is full of rich hypochonriacs, they spend a lot on health care to little result. Town B is full of frugal health nuts, they spend little and are ok health-wise. Simply comparing spending and outcomes is bogus if people sort like this in any significant way. Now we take people from towns A and B and randomly plop them down in State C that has some towns where spending is high (possibly because the people who live there are hypochondriacs) and some where spending is low. But the tourist people from towns A and B don’t sort on State C’s health care system, they just go to the closest place. This sort of semi-randomization gives the comparisons “bite”.

The paper doesn’t say preventive care is useless, nor does it say that emergency services work well. It does say that in this case, higher spending produces better outcomes (like Person pointed out), and it implies that studies saying otherwise need to be examined for endogeneity bias issues.

thehova August 15, 2007 at 2:51 pm

“The results are robust across different types of patients and within groups of destinations that appear to be close demand substitutes.”

yeah, to be honest, that line might hurt my argument.

SteveH August 16, 2007 at 11:04 am

I can’t access the full-text and without that it’s hard to understand the methodology. Two obvious questions, to me, are is there a difference between people who have emergencies in high-spending areas vs. those who have emergencies in low-spending areas, and are there differences between the high-spending and low-spending areas, other than the difference in spending, that can explain the difference in outcomes? If the author does examine those issues, could someone explain. Thanks.

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