Canadian Hospitals That Spend More Get Better Results

KFF Health News | By Jordan Rau

Published March 13, 2012 at 5:05 PM EDT

In Toronto and elsewhere in Ontario, hospitals that spend more appear to do a better job.

Canada has long been a favored talking point for debates over the quality of America's health system, alternatively cast as either Eden or Gomorrah.

A new paper adds a shade of gray into the understanding of Canadian hospitals — and the ongoing debate here about whether when it comes to medical spending, less is more.

The paper published in the JAMA, the Journal of the American Medical Association found Ontario hospitals that spent more on patient care had better outcomes, including lower mortality, fewer readmissions and fewer events related to heart attacks.

At first glance, this conclusion would seem to contradict the world view of the Dartmouth Atlas, which maintains that American hospitals that throw more resources at patients — more specialists, tests, procedures — don't get better results. The Obama administration is a fan of this philosophy, which it wove into parts of the federal health law, the Affordable Care Act.

But the paper explains that Canadian hospitals have far fewer resources than do American ones.

On a per capita basis, the U.S. has three to four times as much specialized technology as does Canada, which spends 57 percent of what the U.S. does on health care. Smaller Canadian hospitals don't have the abundance of CT scanners, MRI machines and cardiac specialists that are so ubiquitous in American hospitals.

"At this spending level, there might still be a positive association between spending and outcomes," the paper says.

By contrast, American hospitals are at the opposite end of the resource curve, says the lead author of the new paper, Dr. Therese Stukel – who is a Dartmouth Atlasite herself. "The U.S. as a system appears to be on the part of the curve where spending more is not necessarily delivering better care," she said in an interview.

This paper may give ammunition to those who say the Canadian system shortchanges patients — and for those who believe Canadian hospitals have a way to go before they can waste money like American hospitals can.