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Regional medical practice variation in high-cost healthcare services: evidence from diagnostic imaging in Austria

Berger, Michael and Czypionka, Thomas (2021) Regional medical practice variation in high-cost healthcare services: evidence from diagnostic imaging in Austria. European Journal of Health Economics, 22 (6). 917 - 929. ISSN 1618-7598

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Identification Number: 10.1007/s10198-021-01298-w

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.

Item Type: Article
Official URL: https://www.springer.com/journal/10198
Additional Information: © 2021 The Authors
Divisions: LSE
Subjects: R Medicine > RA Public aspects of medicine
JEL classification: C - Mathematical and Quantitative Methods > C3 - Econometric Methods: Multiple; Simultaneous Equation Models; Multiple Variables; Endogenous Regressors > C33 - Models with Panel Data
H - Public Economics > H5 - National Government Expenditures and Related Policies > H51 - Government Expenditures and Health
I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health
Date Deposited: 14 Dec 2021 08:27
Last Modified: 18 Dec 2021 00:08
URI: http://eprints.lse.ac.uk/id/eprint/112952

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