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We Interrupt the End of the World for Some Health Care Research

By October 14, 2023Commentary

If you are deeply into a particular business or industry, you are fascinated by certain topics.  I have worked in health care for way too long.  And one issue that is always fascinating is geographic variation in health care utilization and spending.  For pretty much the exact same patient, clinicians in one place will have a different practice pattern than those in another.  And the difference in how a patient is treated appears to have nothing to do with outcomes, so a lot of money could be saved by getting everyone to use the most efficient practice pattern, without changing patient’s outcomes.  There is a long line of research attempting to figure out why this occurs.  One part of that research focuses on physician peer relationships and training.   A new study follows up on that thread.

The authors used Medicare data to try to isolate the role of physician practice patterns in such variation.  They were interested in differences in practice within a specialty and the role of the mix of specialty physicians in a particular area.  They conclude that physician practice styles contribute about a third of overall geographic variation in utilization.  Within the portion of variation caused by physician practice styles, the authors find that about 40% is due to the mix of specialty physicians in a market and 60% to individual variation of practice patterns within a specific specialty.  Other factors contributing to geographic variation include supply factors like number of hospitals and other health care facilities, and patient preferences.  The value of this research is that it helps to focus efforts to get all physicians to use a demonstrable less intense, less expensive practice pattern, which results in the same outcomes.    (NBER Study)

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