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Do Supply‐Side Forces Explain Geographic Variation In Health Care Use?

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  • Kevin Callison
  • Robert Kaestner
  • Jason Ward

Abstract

Regional variation in health care utilization has been well‐documented, yet uncertainty persists about whether this variation is primarily the result of supply‐side or demand‐side forces. We provide new evidence on this issue by examining changes in health care use for the near‐elderly as they transition from being uninsured into Medicare. Results support a causal, supply‐side explanation of regional variation. Estimates indicate that gaining Medicare coverage in above‐median spending regions increases the probability of at least one hospital visit by 40% and the probability of having more than five doctor visits by 26% relative to similar individuals in below‐median spending regions. (JEL D43, H42, H51, I1, I11, I13)

Suggested Citation

  • Kevin Callison & Robert Kaestner & Jason Ward, 2021. "Do Supply‐Side Forces Explain Geographic Variation In Health Care Use?," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 119-139, January.
    • Handle: RePEc:bla:ecinqu:v:59:y:2021:i:1:p:119-139
    DOI: 10.1111/ecin.12926
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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