The researchers assessed the marginal contribution of increased medical spending on health status. Specifically, they explored whether: (1) Elderly people who spend more on medical care have better health outcomes than people who spend less; (2) The marginal effect of medical care spending on health varies across subpopulations of the elderly, stratified by demographic characteristics; and (3) whether Medical spending has an effect on health at the margin. The project built upon prior research, which examined whether Medicare beneficiaries who live in geographic areas with higher average spending have better health outcomes, but did not address the impact on individuals. The objective of this project was to help guide policymakers’ decisions about policy options to reduce health care spending.