Does more medical care improve population health? New evidence for an old controversy

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This article investigates the aggregate relationship between medical care and health for the US population. I use annual state level panel data for the period 1983 to 2000 to estimate static and dynamic health production function models. I find no compelling evidence that greater aggregate utilization of medical care from application of existing technology improves population health by lowering mortality in the short run or long run. My results suggest that development of new medical technologies that diffuse rapidly throughout the nation and at different rates across states may well explain much of the decline in the age-adjusted death rate over the past several decades, as well as persistent differences in mortality across geographic regions. Overall, my findings suggest that the US may be experiencing ‘flat of the curve medicine’ with future improvements in mortality from medical care coming from new and better technologies rather than greater intensity of services.