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High Spending EDs Provide Better Care, Save Live

CAMBRIDGE, MA – Emergency physicians have argued the case for years: The emergency department is not the place to cut back healthcare spending. Now, a new study from the Massachusetts Institute of Technology agrees with them.

The report, published recently in the Journal of Political Economy, finds that patients who are brought by ambulance to higher-cost hospitals achieve better outcomes.

“If the question is, ‘Do high-spending hospitals get better outcomes for emergency care?’ we think that they do,” said co-author Joseph Doyle, PhD, an MIT economist. “We do find that if you go from a low-spending hospital to a high-spending hospital, you get significantly lower mortality rates.”

Using Medicare data from 2002–10, the National Institutes of Health-funded study finds that increasing emergency-care spending by one standard deviation above the mean generates roughly a 10% reduction in mortality.

“People have concluded from previous research that there must be huge waste in the [medical] system,” Doyle said. “At a bare minimum, our research suggests more caution in that interpretation.”

For the investigation, researchers assessed ambulance-dispatch patterns in New York state to determine how similar groups of patients fare when given varying amounts of treatment at different price points.

The study examined patients with 29 types of serious conditions in 40 communities, and used Medicare billing data to see what medical services were provided to them.

The authors note that ambulances are essentially randomly assigned to patients in the same area based on rotational dispatch mechanisms, which affects hospital choice for patients in the same ZIP code. Using data for New York state from 2000-06 that matches exact patient addresses to hospital discharge records, the researchers show that patients who live very near each other but on either side of ambulance-dispatch boundaries can go to different types of hospitals.

Results indicate that higher-cost hospitals have significantly lower one-year mortality rates compared to lower-cost hospitals. Assuming the cost per one year of a life saved is about $80,000, the study found that teaching hospitals and those which are early adopters of the latest technology had the best outcomes, as well as those with higher treatment intensity, according to the report.

The study cautions that, at some point, there are diminishing returns to hospital spending and treatment intensity but that point was not yet reached in this research.

“If we’re trying to find out where the waste is, our research suggests it’s not in emergency care,” Doyle emphasized.