The government should be smart and strategic about the type of spending it will do, says David Schmittlein, MIT Sloan School of Management dean, who says if the government spends on innovative enterprise in America, it can put those dollars to better use.
As the debate about health care costs swirls, I’ve published an article that challenges the common view that higher healthcare spending is not correlated with better health outcomes. To the contrary, I found that tourists who become ill and receive emergency care at “high-spending” hospitals have significantly lower mortality rates compared to tourists who end up in “lower-spending” hospitals.
Because hospitals in general tend to spend more on sicker patients, I knew how difficult it is to estimate returns to healthcare spending. My goal was to compare apples to apples. It’s not possible to conduct a randomized experiment where some patients go to a high-spending hospital system and others are sent to a low-spending one. Since most people don’t choose their vacation destinations based on the budgets of local hospitals, tourists come close to mimicking this type of random assignment: some are exposed to high-spending hospital systems while others are exposed to low-spending ones.