When more expensive medicine is better

The theory behind the health reform law is that you can deliver better care at lower cost. Support for that idea comes from a robust body of research—most prominently the Dartmouth Atlas project. But sometimes, more expensive care is also better care. That's what a team of healthcare economists have found in a new NBER paper, which looked at Medicare patients in New York. It found that, all other things being equal, those treated in higher-spending hospitals had mortality rates 20 to 30 percent lower than those treated in low-cost facilities. Those findings, in some ways, contradict the Dartmouth Atlas research, which has suggested that more can be less.