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When more expensive medicine is better

The Washington Post, April 3, 2012

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.