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.