A new study out of MIT Sloan says hospitals that spend more money provide better care.
Joseph Doyle, a professor at MIT Sloan and author of the study, focused on tourists who sought emergency care while on vacation.
Doyle's study found that tourists who became ill and received emergency care at "high-spending" hospitals had significantly lower mortality rates compared to tourists who went to "lower-spending" hospitals.
These findings are in contradiction to past studies that have suggested that more money doesn't necessarily mean better care.
Doyle's study compared outcomes of heart attack patients in Florida who sought care from both high- and low-spending areas.
He said it's difficult to show returns on healthcare spending because hospitals in general tend to spend more on sicker patients.
Doyle focused on a group of patients with similar health conditions (heart attacks) who were visiting similar destinations, but who sought treatment at hospitals which varied widely by spending levels.
"I wanted to compare apples to apples, and I found that the patients in high-spending areas have higher survival rates than the ones in lower-spending areas," he said.
According to the study, a "typical comparison of a high-spending area and a low-spending one would represent a 50 percent difference in healthcare spending intensity. Such a disparity is associated with a 1.5 percentage-point lower mortality rate among heart-related emergency patients compared to a mortality of 6 percent."
Doyle said his research also addressed whether teaching hospitals, which cost more to run than non-teaching hospitals, tend to have better healthcare outcomes.
"I found that among local populations, going to a teaching hospital was not associated with mortality, possibly because these hospitals tend to treat sicker people. However, among tourists in an emergency situation, going to a teaching hospital resulted in lower mortality," he said.
In contrast to previous studies, which have been cited to support limits on Medicare growth, Doyle said, "It looks like spending has an impact in terms of saving lives in emergency situations."
He noted that the United States spends more than $2 trillion per year, or 16 percent of GDP, with increases expected as the population ages.
"There is a presumption that much of our healthcare spending is wasted" he said, "but high levels of spending may be justified because it also seems to increase survival rates in emergency situations."