Causes of regional variation in health-care use
Health care use varies significantly between geographical regions. This variation has several potential causes. One example is the regional heterogeneity in medical care supply. There are, for example, substantial regional differences in physician numbers and hospital beds per 1,000 inhabitants. Differences in care supply can also result from differing practice styles and preferences among health providers or from distinct regions having different health concerns and requirements. There may also be heterogeneity in patients’ preferences for medical use.
These alternative explanations lead to very disparate policy conclusions. Differences in the supply of medical care are hard to reconcile with the German constitutional mandate of equal living conditions across regions. Similarly, variations can also point to the inefficient allocation of resources, where oversupply in some areas can coexist with undersupply in others. Access to medical care in areas with declining populations is a considerable concern in the political arena and public view. However, if regional difference in medical care use can be explained predominantly by differences in patient health and preferences, i.e. demand-side factors, then regional differences may still reflect the efficient allocation of resources.
In this project, we exploit patient migration in order to disentangle the effects of supply factors from those of demand factors. Our goals are:
- to decompose the shares of regional differences in total medical care expenditure per capita that can be attributed to supply and demand factors,
- to examine regional differences in the frequency of specific procedures, and
- to examine whether and to what degree regional differences in health care use correspond to differences in the quality of care.