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