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Sources of Geographic Variation in Health Care: Evidence From PatientMigration

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Listed:
  • 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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    References listed on IDEAS

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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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    Cited by:

    1. Simona Grassi & Ching-to Albert Ma, 2016. "Information acquisition, referral, and organization," RAND Journal of Economics, RAND Corporation, vol. 47(4), pages 935-960, November.
    2. Adam Sacarny, 2018. "Adoption and Learning Across Hospitals: The Case of a Revenue-Generating Practice," NBER Working Papers 24497, National Bureau of Economic Research, Inc.
    3. Hentschker, C. & Wübker, A., 2016. "The impact of technology diffusion in health care markets - Evidence from heart attack treatment," Health, Econometrics and Data Group (HEDG) Working Papers 16/29, HEDG, c/o Department of Economics, University of York.
    4. Brekke, Kurt R. & Holmås, Tor Helge & Monstad, Karin & Straume, Odd Rune, 2017. "Do treatment decisions depend on physicians' financial incentives?," Journal of Public Economics, Elsevier, vol. 155(C), pages 74-92.
    5. Rudy Douven & Minke Remmerswaal & Ana Moura & Martin Salm, 2018. "Causes of regional variation in Dutch healthcare expenditures: evidence from movers," CPB Discussion Paper 384, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Leila Agha & Brigham Frandsen & James B. Rebitzer, 2017. "Fragmented Division of Labor and Healthcare Costs: Evidence from Moves Across Regions," NBER Working Papers 23078, National Bureau of Economic Research, Inc.
    7. Salm, Martin & Wübker, Ansgar, 2017. "Causes of regional variation in healthcare utilization in Germany," Ruhr Economic Papers 675, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    8. repec:kap:enreec:v:69:y:2018:i:3:d:10.1007_s10640-017-0214-8 is not listed on IDEAS
    9. Premkumar, Deepak & Jones, Dave & Orazem, Peter, 2016. "Hospital Closure and Hospital Choice: How Hospital Quality and Availability will Affect Rural Residents," ISU General Staff Papers 201611290800001009, Iowa State University, Department of Economics.
    10. Janet Currie & W. Bentley MacLeod & Jessica Van Parys, 2015. "Physician Practice Style and Patient Health Outcomes: The Case of Heart Attacks," NBER Working Papers 21218, National Bureau of Economic Research, Inc.
    11. Patrick Kline & Raffaele Saggio & Mikkel S{o}lvsten, 2018. "Leave-out estimation of variance components," Papers 1806.01494, arXiv.org.
    12. Michael D. Frakes & Matthew B. Frank & Seth A. Seabury, 2017. "The Effect of Malpractice Law on Physician Supply: Evidence from Negligence-Standard Reforms," NBER Working Papers 23446, National Bureau of Economic Research, Inc.
    13. David Powell & Seth A. Seabury, 2014. "Medical Care Spending and Labor Market Outcomes Evidence from Workers' Compensation Reforms," Working Papers WR-1028-1, RAND Corporation.
    14. repec:eee:jhecon:v:60:y:2018:i:c:p:142-164 is not listed on IDEAS
    15. Koen Jochmans & Martin Weidner, 2016. "Fixed-Effect Regressions on Network Data," Papers 1608.01532, arXiv.org, revised Jul 2018.
    16. repec:eee:pubeco:v:167:y:2018:i:c:p:190-204 is not listed on IDEAS
    17. Elaine Kelly & George Stoye, 2015. "New joints: private providers and rising demand in the English National Health Service," IFS Working Papers W15/22, Institute for Fiscal Studies.
    18. Ko, Hansoo, 2016. "Unmet healthcare needs and health status: Panel evidence from Korea," Health Policy, Elsevier, vol. 120(6), pages 646-653.
    19. Alexander Ahammer & Ivan Zilic, 2017. "Do Financial Incentives Alter Physician Prescription Behavior? Evidence from Random Patient-GP Allocations," Working Papers 1701, The Institute of Economics, Zagreb.
    20. Alkalay, Adi & Eizenberg, Alon & Lahad, Amnon & Shurtz, Ity, 2018. "Physician workload and treatment choice: the case of primary care," CEPR Discussion Papers 13157, C.E.P.R. Discussion Papers.
    21. Leila Agha & Keith Marzilli Ericson & Kimberley H. Geissler & James B. Rebitzer, 2018. "Team Formation and Performance: Evidence from Healthcare Referral Networks," NBER Working Papers 24338, National Bureau of Economic Research, Inc.
    22. Alexander Ahammer & Thomas Schober, 2017. "Exploring Variations in Healthcare Expenditures – What is the Role of Practice Styles?," Economics working papers 2017-05, Department of Economics, Johannes Kepler University Linz, Austria.
    23. Tatyana Deryugina & David Molitor, 2018. "Does When You Die Depend on Where You Live? Evidence from Hurricane Katrina," NBER Working Papers 24822, National Bureau of Economic Research, Inc.
    24. David Molitor, 2016. "The Evolution of Physician Practice Styles: Evidence from Cardiologist Migration," NBER Working Papers 22478, National Bureau of Economic Research, Inc.

    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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