Long-term returns to local health-care spending

This paper investigates the effects of health-care spending on mortality rates of patients who experienced a heart attack. We relate in-hospital deaths to in-hospital spending and post-discharge deaths to post-discharge health-care spending. In our analysis, we use detailed administrative data on individual personal characteristics including comorbidities, information about the type of medical treatment and information about health-care expenses at the regional level. To account for potential selectivity in the region of health-care treatment we compare local patients with visitors and stayers with recent movers from a different region. We find that in regions with higher health-care spending mortality after heart attacks is substantially lower. From this we conclude that there are long-term returns to local health-care spending.