title: Evidence on the efficacy of inpatient spending on Medicare patients.
abstract: BACKGROUND
  It is widely believed that a significant amount, perhaps as much as 20 to 30 percent, of health care spending in the United States is wasted, despite market forces such as managed care organizations and large, self-insured firms with a financial incentive to eliminate waste of this magnitude.
  
  
  METHODS
  This article uses Medicare claims data to study the association between inpatient spending and the thirty-day mortality of Medicare patients admitted to hospitals between 2001 and 2005 for surgery (general, orthopedic, vascular) and medical conditions (acute myocardial infarction [AMI], congestive heart failure [CHF], stroke, and gastrointestinal bleeding).
  
  
  RESULTS
  Estimates from the analysis indicated that except for AMI patients, a 10 percent increase in inpatient spending was associated with a decrease of between 3.1 and 11.3 percent in thirty-day mortality, depending on the type of patient.
  
  
  CONCLUSIONS
  Although some spending may be inefficient, the results suggest that the amount of waste is less than conventionally believed, at least for inpatient care.
authors.affiliation: University of Illinois, Chicago, IL 60614, USA. kaestner@uic.edu
authors.forename: Robert
authors.initials: R
authors.lastname: Kaestner
authors.forename: Jeffrey H
authors.initials: JH
authors.lastname: Silber
mesh_terms: D000368:Aged; D000369:Aged, 80 and over; D017598:Efficiency, Organizational; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006302:Health Services Research; D017722:Hospital Charges / Q000706:statistics & numerical data; D017052:Hospital Mortality / Q000639:trends; D006801:Humans; D007297:Inpatients / Q000706:statistics & numerical data*; D007344:Insurance Claim Reporting / Q000191:economics; D016018:Least-Squares Analysis; D008389:Marketing of Health Services / Q000191:economics; D006278:Medicare / Q000191:economics*; D015999:Multivariate Analysis; D012051:Reimbursement Mechanisms / Q000191:economics; D012107:Research Design; D020379:Risk Adjustment; D013514:Surgical Procedures, Operative / Q000009:adverse effects / Q000191:economics* / Q000401:mortality; D016019:Survival Analysis; D014481:United States / Q000453:epidemiology