A Test of Supply-Side Explanations of Geographic Variation in Health Care Use

52 Pages Posted: 17 Sep 2018 Last revised: 14 Jun 2021

See all articles by Kevin Callison

Kevin Callison

Tulane University - Department of Global Health Systems and Development

Robert Kaestner

University of Chicago; National Bureau of Economic Research (NBER)

Jason Ward

University of Illinois at Chicago - Department of Economics

Date Written: September 2018

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.

Suggested Citation

Callison, Kevin and Kaestner, Robert and Ward, Jason, A Test of Supply-Side Explanations of Geographic Variation in Health Care Use (September 2018). NBER Working Paper No. w25037, Available at SSRN: https://ssrn.com/abstract=3250583

Kevin Callison (Contact Author)

Tulane University - Department of Global Health Systems and Development ( email )

New Orleans, LA 70112
United States

Robert Kaestner

University of Chicago ( email )

1155 East 60th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

5 Hanover Square 16th floor
New York, NY 10004
United States

Jason Ward

University of Illinois at Chicago - Department of Economics ( email )

725 University Hall (UH)
Chicago, IL 60607-7121
United States

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