Working Paper: NBER ID: w20789
Authors: Amy Finkelstein; Matthew Gentzkow; Heidi Williams
Abstract: We study the drivers of geographic variation in US health care utilization, using an empirical strategy that exploits migration of Medicare patients to separate the role of demand and supply factors. Our approach allows us to account for demand differences driven by both observable and unobservable patient characteristics. We find that 40-50 percent of geographic variation in utilization is attributable to patient demand, with the remainder due to place-specific supply factors. Demand variation does not appear to result from differences in past experiences, and is explained to a significant degree by differences in patient health.
Keywords: health care; geographic variation; patient migration; Medicare
JEL Codes: H51; I1; I11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Patient health (I10) | Healthcare utilization (I11) |
| Patient demand (R22) | Healthcare utilization (I11) |
| Place-specific supply factors (R32) | Healthcare utilization (I11) |
| Migration from high-utilization to low-utilization areas (R23) | Healthcare spending (H51) |
| Demand-side factors (R22) | Difference in log utilization (L97) |