Regional Science & Urban Economics
Francesco Moscone, Jonathan Skinner, Elisa Tosetti, Laura Yasaitis
As health care spending continues to strain government and household budgets, there is increasing interest in measuring whether the incremental dollar spent on health care is worth it. In studying this question, researchers often make two key assumptions: that health care intensity can be summarized by a single index such as average spending, and that samples of hospitals or regions are spatially independent: Manhattan and the Bronx are no more alike than are Manhattan and San Diego, for example. In this paper we relax both assumptions. Using detailed data on 897,008 elderly Medicare enrolees with acute myocardial infarction (or a heart attack) during 2007–11, we find first that the total level of health care spending has little impact on health outcomes; more important is how the money is spent. …