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Sources of Geographic Variation in Health Care: Evidence From PatientMigration

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  • Amy Finkelstein
  • Matthew Gentzkow
  • Heidi Williams

Abstract

We study the drivers of geographic variation in U.S. health care utilization, using an empirical strategy that exploits migration of Medicare patients toseparate the role of demand and supply factors. Our approach allows us toaccount for demand differences driven by both observable and unobservablepatient characteristics. Within our sample of over-65 Medicare beneficiaries, wefind that 40–50% of geographic variation in utilization is attributable todemand-side factors, including health and preferences, with the remainder due toplace-specific supply factors.

Suggested Citation

  • Amy Finkelstein & Matthew Gentzkow & Heidi Williams, 2016. "Sources of Geographic Variation in Health Care: Evidence From PatientMigration," The Quarterly Journal of Economics, Oxford University Press, vol. 131(4), pages 1681-1726.
  • Handle: RePEc:oup:qjecon:v:131:y:2016:i:4:p:1681-1726.
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    1. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 128(3), pages 967-1015.
    2. Tomas J. Philipson & Seth A. Seabury & Lee M. Lockwood & Dana P. Goldman & Darius N. Lakdawalla, 2010. "Geographic Variation in Health Care: The Role of Private Markets," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(1 (Spring), pages 325-361.
    3. Bart J. Bronnenberg & Jean-Pierre H. Dube & Matthew Gentzkow, 2012. "The Evolution of Brand Preferences: Evidence from Consumer Migration," American Economic Review, American Economic Association, vol. 102(6), pages 2472-2508, October.
    4. Abe C. Dunn & Adam Shapiro & Eli Liebman, 2011. "Geographic Variation in Commercial Medical Care Expenditures: A Decomposition Between Price and Utilization," BEA Working Papers 0075, Bureau of Economic Analysis.
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    More about this item

    JEL classification:

    • 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

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