Determinants of Regional Variation in Health Expenditures in Germany

Abstract

Health care expenditure in Germany shows clear regional differences. Such geographic variations are often seen as an indicator for inefficiency. With its homogeneous health care system, low co-payments and uniform prices, Germany is a particularly suited example to analyse regional variations. We use data for the year 2011 on expenditure, utilization of health services and state of health in Germany's statutory health insurance system. This data, which originate from a variety of administrative sources and cover about 90% of the population, are enriched with a wealth of socio-economic variables, data on pollutants, prices and individual preferences. State of health and demography explains 55% of the differences as measured by the standard deviation while all control variables account for a total of 72% of the differences at county level. With other measures of variation, we can account for an even greater proportion. A higher proportion of variation than usually supposed can thus be explained. Whilst this study cannot quantify inefficiencies, our results contradict the thesis that regional variations reflect inefficiency. Copyright © 2015 John Wiley & Sons, Ltd.

Bouncing back from health shocks: Locus of control and labor supply

“…Co-payments for ambulatory or hospital services -with minor exceptions -are small and equal for all insured. There are regional differences in base rates, but these differences can be controlled for by regional fixed effects or measures of local economic activity (see Goepffahrt et al 2015).…”

What Explains the Regional Variation in the Use of General Practitioners in Australia?

“…This strategy has been commonly utilised in analysing regional variation in healthcare spending [1,32]. In addition to adopt R-squared value to quantify how well the model fits the data, we also used standard deviation of the residuals, which is determined by the standard deviation of all residuals after regression in each step, following a previous study by D Göpffarth, T Kopetsch and H Schmitz [32]. The more we can explain by observable control variables, the lower the standard deviation becomes.…”

A Window on Geographic Variation in Health Care: Insights from EuroHOPE

“…Studies from the USA (Medicare) and Europe showed that a substantial part of regional variation in health spending is related to differences in demography and health status in particular (Zuckerman et al, 2010;Gopffarth et al, 2015;Reich et al, 2012;Skinner, 2011). Studies from the USA (Medicare) and Europe showed that a substantial part of regional variation in health spending is related to differences in demography and health status in particular (Zuckerman et al, 2010;Gopffarth et al, 2015;Reich et al, 2012;Skinner, 2011).…”

“…Other researchers have focused on regional variations within a single country. Studies from the USA (Medicare) and Europe showed that a substantial part of regional variation in health spending is related to differences in demography and health status in particular (Zuckerman et al, 2010;Gopffarth et al, 2015;Reich et al, 2012;Skinner, 2011). Dissimilar impacts of institutional and supply factors have been reported across studies and countries.…”

“…For example, in the USA, Medicare spending was found to vary between regions largely because of differences in post-acute care, while in the private insurance market variation in spending was explained by prices mostly . In Germany, the impact of price differences on regional variations was limited (Gopffarth et al, 2015). Disparity in quality of care may explain regional differences in spending as well.…”