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Geographic Variation in Commercial Medical Care Expenditures: A Decomposition Between Price and Utilization

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  • Abe C. Dunn
  • Adam Shapiro
  • Eli Liebman

    (Bureau of Economic Analysis)

Abstract

This study examines geographic variation in commercial medical care expenditures. Medical care expenditures are decomposed between service prices and service utilization. We find that both service prices and utilization contribute to overall differences in health spending across geographic markets. Our findings suggest that potential expenditure savings may be possible from more efficient utilization. However, the large variation in underlying service prices suggests that deviations in overall spending may persist, even if utilization differences across markets are diminished.

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Bibliographic Info

Paper provided by Bureau of Economic Analysis in its series BEA Working Papers with number 0075.

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Date of creation: Jul 2011
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Handle: RePEc:bea:wpaper:0075

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  1. Aizcorbe, Ana & Nestoriak, Nicole, 2011. "Changing mix of medical care services: Stylized facts and implications for price indexes," Journal of Health Economics, Elsevier, vol. 30(3), pages 568-574, May.
  2. Phelps, Charles E., 1995. "Welfare loss from variations: further considerations," Journal of Health Economics, Elsevier, vol. 14(2), pages 253-260, June.
  3. Amitabh Chandra & Douglas Staiger, 2004. "Testing a Roy Model with Productivity Spillovers: Evidence from the Treatment of Heart Attacks," NBER Working Papers 10811, National Bureau of Economic Research, Inc.
  4. Abe Dunn & Adam Hale Shapiro, 2011. "Physician Market Power and Medical-Care Expenditures," BEA Working Papers 0078, Bureau of Economic Analysis.
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Cited by:
  1. Abe Dunn & Eli Liebman & Adam Hale Shapiro, 2013. "Developing a Framework for Decomposing Medical-Care Expenditure Growth: Exploring Issues of Representativeness," NBER Chapters, in: Measuring Economic Sustainability and Progress National Bureau of Economic Research, Inc.
  2. Abe Dunn & Adam Hale Shapiro, 2012. "Physician Market Power and Medical-Care Expenditures," BEA Working Papers 0084, Bureau of Economic Analysis.
  3. Eibich, Peter & Ziebarth, Nicolas R., 2013. "Analyzing Regional Variation in Health Care Utilization Using (Rich) Household Microdata," IZA Discussion Papers 7409, Institute for the Study of Labor (IZA).
  4. Abe Dunn & Eli Liebman & Adam Hale Shapiro, 2012. "Decomposing medical-care expenditure growth," Working Paper Series 2012-26, Federal Reserve Bank of San Francisco.
  5. Abe Dunn & Adam Hale Shapiro, 2013. "The impact of health care reform on physician payments: evidence from Massachusetts," Working Paper Series 2013-36, Federal Reserve Bank of San Francisco.

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