Working Paper: NBER ID: w25037
Authors: Kevin Callison; Robert Kaestner; Jason Ward
Abstract: Evidence of regional variation in health care utilization has been well-documented over the past 40 years. Yet uncertainty persists about whether this variation is primarily the result of supply-side or demand-side forces, and the difference matters for both theory and policy. In this article, we provide new evidence as to the cause of geographic variation in health care utilization. We do so by examining changes in health care use by the near-elderly as they transition from being uninsured into Medicare. Results provide support for a causal supply-side explanation of regional variation. Estimates indicate that gaining Medicare coverage in above-median spending regions increases the probability of at least one hospital visit by 36% and the probability of having more than five doctor visits by 25% relative to similar individuals in below-median spending regions.
Keywords: No keywords provided
JEL Codes: D43; H42; H51; I1; I11; I13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Gaining Medicare coverage (I18) | Health care utilization (I11) |
| Higher Medicare spending (H51) | Gaining Medicare coverage increases health care utilization (H51) |
| Gaining Medicare coverage in above-median spending regions (H51) | Probability of at least one hospital visit (I11) |
| Gaining Medicare coverage in above-median spending regions (H51) | Probability of five or more doctor visits (I11) |
| Higher market power of providers in high-spending areas (I11) | Increased demand for health care utilization (I11) |
| Higher Medicare spending (H51) | Greater increase in health care use in high versus low-spending HRRs (I11) |