The reality of diminishing marginal returns on healthcare spending

... [Peter] Orszag has become intrigued by the work of Mitchell Seltzer, a hospital consultant in central New Jersey. Seltzer has collected large amounts of data from his clients on how various doctors treat patients, and his numbers present a very similar picture to the regional data. Seltzer told me that big-spending doctors typically explain their treatment by insisting they have sicker patients than their colleagues. In response he has made charts breaking down the costs of care into thin diagnostic categories, like “respiratory-system diagnosis with ventilator support, severity: 4,” in order to compare doctors who were treating the same ailment. The charts make the point clearly. Doctors who spent more — on extra tests or high-tech treatments, for instance — didn’t get better results than their more conservative colleagues. In many cases, patients of the aggressive doctors stay sicker longer and die sooner because of the risks that come with invasive care.