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

Michael Berger and Thomas Czypionka

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: blinder–Oaxaca decomposition; health policy; healthcare service utilization; magnetic resonance imaging; medical practice variation (search for similar items in EconPapers)
JEL-codes: C33 H51 I18 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2021-08-01
New Economics Papers: this item is included in nep-eur, nep-hea and nep-ure
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Citations: View citations in EconPapers (2)

Published in European Journal of Health Economics, 1, August, 2021, 22(6), pp. 917 - 929. ISSN: 1618-7598

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