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Regional medical practice variation in high-cost healthcare services

Author

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  • Michael Berger

    (Medical University of Vienna)

  • Thomas Czypionka

    (Institute for Advanced Studies
    London School of Economics and Political Science)

Abstract

Magnetic resonance imaging (MRI) is a popular yet cost-intensive diagnostic measure whose strengths compared to other medical imaging technologies have led to increased application. But the benefits of aggressive testing are doubtful. The comparatively high MRI usage in Austria in combination with substantial regional variation has hence become a concern for its policy makers. We use a set of routine healthcare data on outpatient MRI service consumption of Austrian patients between Q3-2015 and Q2-2016 on the district level to investigate the extent of medical practice variation in a two-step statistical analysis combining multivariate regression models and Blinder–Oaxaca decomposition. District-level MRI exam rates per 1.000 inhabitants range from 52.38 to 128.69. Controlling for a set of regional characteristics in a multivariate regression model, we identify payer autonomy in regulating access to MRI scans as the biggest contributor to regional variation. Nevertheless, the statistical decomposition highlights that more than 70% of the regional variation remains unexplained by differences between the observable district characteristics. In the absence of epidemiological explanations, the substantial regional medical practice variation calls the efficiency of resource deployment into question.

Suggested Citation

  • Michael Berger & Thomas Czypionka, 2021. "Regional medical practice variation in high-cost healthcare services," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(6), pages 917-929, August.
    • Handle: RePEc:spr:eujhec:v:22:y:2021:i:6:d:10.1007_s10198-021-01298-w
    DOI: 10.1007/s10198-021-01298-w
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    Cited by:

    1. Marie Dreger & Hauke Langhoff & Cornelia Henschke, 2022. "Adoption of large-scale medical equipment: the impact of competition in the German inpatient sector," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(5), pages 791-805, July.
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    More about this item

    Keywords

    Healthcare service utilization; Magnetic resonance imaging; Medical practice variation; Health policy; Blinder–Oaxaca decomposition;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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